Fianna Fáil Finance Spokesperson has said all the indications are that Finance Minister Michael Noonan has given up the ghost on securing any further progress on the scandal of excessive standard variable mortgages rates being charged by banks in Ireland.
Deputy McGrath was speaking following Finance Oral Questions in the Dáil during which he pressed the Minister on the lack of progress on the issue.
Deputy McGrath stated, “Today, the Minister has effectively closed the door on taking any action on the issue of rip-off interest rates saying he wants to wait a number of months to see if competition forces down rates. This is a serious climb down from the Minister who had previously threatened to increase the levy on banks or introduce legislation to give the Central Bank powers to tackle excessive interest rates.
“While AIB has reduced its variable rate to 3.65%, progress has been minimal across a number of the other banks. The truth is that Bank of Ireland, Permanent TSB, KBC, Ulster Bank and ACC Bank continue to charge the vast majority of their existing variable rate customers between 4% and 4.5%. Customers of Danske Bank and of US private equity funds also continue to pay rates that are dramatically out of line with variable rates elsewhere in Europe.
“While a number of banks have reduced their fixed rates and introduced new loan to value products, too many existing customers are being left behind. The Minister for Finance and the government seem content to sit back and continue to allow the banks charge rates that bear no relation to their cost of funds. While customers are to be encouraged to shop around, the truth is that switching a mortgage from one lender to another can be difficult and is not an option open to everyone. Fianna Fáil remains committed to introducing legislation to give the Central Bank greater powers to intervene when a market failure has resulted in interest rates that are simply unjustifiable.”