Vulture funds will be hit with regulations, insists minister
NEW regulations governing vulture funds will have “consequences” for the sale of mortgages by Permanent TSB, Finance Minister Paschal Donohoe acknowledged.
However, he refused to state definitely whether legal changes will be introduced before PTSB offloads thousands of loans in the coming months.
The Cabinet has agreed to accept legislation proposals from Fianna Fáil, which will see vulture funds brought under the remit of the Central Bank.
And Mr Donohoe is to hold meetings with the CEOs of the country’s main banks in the coming weeks at which he will discuss the Government’s attitude to the sell-off of loans.
PTSB’s decision to sell 18,000 non-performing loans (NPLs) sparked a political backlash that will now also result in a review of the Central Bank’s code of conduct on repossessions.
The Government is keen for this study to be “as soon as possible” in a bid to reassure homeowners who fear that vulture funds will not offer them the same opportunities to address arrears as the main banks.
Mr Donohoe said he understands the need of banks to “get their balance sheets and financial affairs in line with regulators”, but must also take note of the “anxiety” the issue is causing for some households.
Fianna Fáil’s finance spokesman Michael McGrath said he believes vulture funds can be regulated before the sale “if the political will is there on all sides of the Oireachtas”.
He added that it is “imperative that this legislation is enacted as a matter of priority and certainly in advance of any suggested loan sales.”
Mr McGrath said it’s an “absolutely necessary step” to bring vulture funds under Central Bank regulation.
He said this is because a fund that buys up distressed loans “calls all the shots, makes all the big decisions around the future of the loan, whether it be to initiate enforcement proceedings, to restructure a loan or indeed to change the interest rate”.
Speaking about Cabinet discussing the issue, Mr Donohoe told reporters he will work with his Fianna Fáil counterpart to prioritise legislation.
“I’m determined that everybody is treated fairly,” he said, adding that new regulations will have “consequences”.
However, Mr Donohoe would not confirm how exactly the political manoeuvring will affect PTSB, which is 75pc owned by the State.
Mr McGrath said it’s “important that people are fully protected”.
He said: “This Bill or an equivalent Government Bill – we’re not precious about it – must become law and become law as a matter of priority”.