Minister for Finance Paschal Donohoe is to meet with Fianna Fáil this week as the main Opposition party demands that so called "vulture funds" lining up to buy billions worth of loans are regulated.
Michael McGrath, the Fianna Fáil finance spokesman, is publishing a Bill today that will call on vulture funds to be subject to the same regulation as other financial institutions.
Mr McGrath's bill will be discussed in the Dáil next week and comes against the backdrop of a potential sale of loans with billions of euro by Permanent TSB.
Speaking on Tuesday, Mr McGrath said the confidence and supply agreement between Fianna Fáil and Fine Gael, which underpins the minority government, allows for greater protection of mortgage holders.
Mr McGrath, a TD for Cork South Central, says there is a gap in consumer protection because vulture funds which own distressed assets are not regulated by the Central Bank.
He declined to say, however, that Fianna Fáil opposed outright the sale of the loans but repeatedly said any sales should be to regulated funds.
Government sources have said they want to reach an arrangement with Fianna Fáil on the issue, and Mr McGrath said he had spoken to Mr Donohoe on Tuesday morning.
Fianna Fáil figures say that any moves by the Government not to oppose the Bill must be followed by action. Party sources say the Government has a record of allowing Bills pass the initial stages of the legislative process because it does not command a Dáil majority, only to leave them languish without any follow-on action.
“I had a brief conversation with Minister Donohoe this morning and we are going to meet this week to discuss the issue in more detail,” Mr McGrath said. “For me, it is a pretty fundamental question really.”
His bill will “ensure these funds are regulated on an equal footing with other financial institutions”.
“That’s the key issue for us. That’s the policy position that gives expression to the confidence and supply agreement. Next week, this Bill will be the Fianna Fáil private member’s bill so there will be a full debate and there will be a vote if necessary.
“But beyond that, we want enactment. We actually want this proposal, whether it is a Fianna Fáil proposal to fully regulate these funds, or a Government proposal, if they come forward with such a proposal. We want to give effect that policy so that all mortgage holders all are afforded the same degree of protection.”
Mr McGrath also called on Permanent TSB to give a “more detailed statement as to what their intentions are” to help assuage public anxiety.
“Why should somebody living at number 10 in a housing estate have less protection than somebody living in number 11? And, in my view, that is the case if one person has their loan owned by a fully-regulated financial institution and the other person has their loan owned by an unregulated vulture fund.
“They are in a much more vulnerable position in practice. Don’t take our word for it, take the word of mortgage advocates representing those who are in distress in relation to their mortgage.”
Fianna Fáil will also be asking the Central Bank to outline its position.
“The Central Bank was at odds with the Government decision back in 2015 not to regulate these vulture funds,” Mr McGrath said. “The Central Bank has confirmed in writing that their preference was that the actual loan owners, the vulture funds, would be fully regulated and that didn’t happen.
“The Government has acted contrary to the advice of the central bank. It remains to be seen what the Central Bank has to say on the issue now. We have written to them, and we have asked them their position at this stage.”