LEO: I WILL HOLD BANKS TO ACCOUNT
»»Tanaiste in mortgage break pledge »»Additional profit ‘would be a scandal’
TANAISTE Leo Varadkar said it would be a “serious scandal” if banks were to profit from mortgage breaks in the pandemic.
The Fine Gael leader added he will come down on lenders “like a tonne of bricks” if this is the case.
He said he warned them in May it would not be acceptable to make money from charging interest.
Mr Varadkar was speaking in the Dail in response to Sinn Fein’s Pearse Doherty who raised the issue of the “Covid penalty”.
Mr Doherty said it is now clear none of the regulators require interest to be charged.
He added 80,000 customers who took the mortgage break face increased repayments and debts.
Addressing banks, Mr Varadkar said: “I said to them it cannot be acceptable for them to get some sort of premium from this or make some sort of additional profit.
“I would see this action being as serious as the tracker mortgage scandal.”
Mr Doherty argued the minutes of a meeting in May between banks and the ex-taoiseach showed lenders said they had been told by the regulator they had to charge interest.
However, Mr Varadkar refuted this and said banks “never claimed” they could not waive levies.
He added the issue is lenders were told someone had to pay the cost of the payment break and that burden is wrongly falling on customers.
Mr Varadkar said: “What I must find out over the next couple of weeks as Tanaiste and minister with responsibility for business is whether the banks will make any extra money from this in comparison to a position where loans had not been extended?”
Mr Doherty insisted the minutes of the meeting stated Bank of Ireland said interest had to be charged because the regulator demanded it. He added a Permanent TSB customer with a €250,000 mortgage over 30 years who takes a six-month break faces more than €6,200 in extra costs.
He said no other country in Europe charges this way and called on the Tanaiste to bring in legislation to protect homeowners.
Mr Doherty added Mr Varadkar needs to explain why his version of events “contradicts” everyone else.
He said: “It is now clear that Leo Varadkar was asleep at the wheel.”