Legislative action to force banks to pass on ECB rate cuts is essential, otherwise Galway families will face a New Year of devastating mortgage and personal debts.
This is the view of Galway Fine Gael senator Fidelma Healy Eames, who was speaking following confirmation from National Irish Bank that it is to hike up interest rates later this week. Also, Ulster Bank, Bank of Ireland, and AIB have indicated that they will not be passing on the rate cut announced by the ECB last week.
Sen Healy Eames has condemned the banks’ stance as “high-handed arrogance”.
“Many banks are determined to defy the wishes of the Government and the Financial Regulator,” said Sen Healy Eames. “The banks, by refusing to pass on rate cuts, are ensuring even more people will fall behind in their repayments. This is an outrage when one considers that these are the very same citizens whose taxes have been used to bail out six of the institutions.”
According to the senator, Galwegians between the ages of 30 to 55, to whom she has spoken, have indicated that the biggest challenge facing them is mortgage debt and personal debt.
She said the “gravity of this situation has been further compounded” by the announcement from National Irish Bank that, not only is it not passing on last week’s ECB rate cut, but that it is hiking up rates by almost one per cent, starting tomorrow.
“This can only be seen as a direct challenge to the Government’s position,” she said. “It’s time that we seriously look at the legislative options open to us, to force the banks to take a fairer approach.
In the Dáil on Tuesday, An Taoiseach Enda Kenny said he would look at introducing legislation to force the banks to pass on the cuts. He also said he is prepared to engage with the Financial Regulator if an increase in his powers is needed.
“Such a move is now necessary,” said Sen Healy Eames. “It is entirely reasonable for the Government or the Financial Regulator to have significant input on the decisions taken by banks that have been bailed out by the State.”
