Central Bank comments on vulture funds raise serious questions for government
Sinn Féin MEP Matt Carthy has said that comments made by Central Bank Deputy Governor Sharon Donnery this weekend raise serious questions about the government's failure to regulate vulture funds and protect Irish borrowers.
Carthy, a member of the Economic and Monetary Affairs Committee in the European Parliament, said: “Comments reported in the media made by Sharon Donnery reveal that as far back as 2011, the Central Bank questioned the government on the value of exempting foreign vulture funds from the Central Bank’s Code of Conduct on Mortgage Arrears (CCMA).
“For several years now Ireland has been experiencing a housing and homelessness crisis. Evictions by banks of families in mortgage arrears are one contributing factor to this crisis in the Irish state. Banks are increasingly selling off distressed mortgages to vulture funds at reduced prices, who have proven to pursue repossessions of homes even more aggressively.
“While the government belatedly took steps to bring some of the activities of vulture funds under Central Bank legislation in the past year, these revelations beg the question: why has the Department of Finance ignored the Central Bank’s advice on the protection of borrowers for almost five years while families were being evicted from their homes?
“Donnery states that in 2011 she personally wrote to the Department calling on it to urgently reconsider the exemption of vulture funds from the Central Bank's code of conduct for mortgage arrears, with a view towards ensuring borrowers had the same level of protection whether their loans were from banks or non-bank funds.
“Not only did the government ignore the Central Bank’s advice – it also actively courted US vulture funds into the state through a variety of mechanisms. It’s been reported, for example, that during 2013 and 2014 the Department of Finance met with vulture funds at least 65 times.”
Carthy continued: “It’s clear that the recent half-hearted effort to bring some of the vulture funds’ activities under Central Bank regulation is not enough to limit the damage these organisations are doing to our society.
“Last month Ulster Bank announced the sale of 900 family homes with distressed mortgages as part of a €2.5 billion property loan portfolio to vulture funds. This follows the purchase in March of 200 family homes by a Goldman Sachs vulture fund in Tyrellstown, Dublin. We can only expect to see more sales of mortgages to vulture funds, and more evictions from family homes, without robust legislation.
“Sinn Féin has called for the introduction of emergency legislation to prevent the sale of distressed mortgages to vulture funds whose intent is to evict families onto the street in order to make a quick profit. If necessary the government should purchase these distressed mortgages from the banks in order to contribute to the resolution of the housing and homelessness crisis.” ENDS