It’s looking like the new minority government is facing it’s first defeat as Fianna Fail’s mortgage bill is set to be passed tonight. The new legislation would grant around 300,000 cash strapped families a cut in their mortgage payments but amid angry scenes in the Dail last night Minister for Finance Michael Noonan said the move has wiped 10% off bank shares.
Mr Noonan has vehemently opposed the proposed bill claiming it contains three major flaws. He also says the Central Bank governor and his predecessor have stated they don’t want to regulate interest rates.
With regard to his claims of a 10% reduction in bank shares Fianna Fáil finance spokesman Michael McGrath accused him of “scaremongering.”
The Bill is designed to give the Central Bank new powers that would have the effect of reducing monthly repayments for many of the 300,000 households paying variable interest on their loans.
Fianna Fáil has contended that variable rates for mortgages in Ireland are well above average European rates.
It’s claimed a cut of 1 per cent would benefit households by an average of €1,300 a year.
Fianna Fáil brought a similar motion to the Dáil in March 2015, which was supported by Sinn Féin.
Both parties have separately argued that banks have failed to pass on the current low rates in Europe and are ripping off their customers on variable rates.
Last night Sinn Féin indicated it would support the Central Bank (Variable Rate Mortgages) Bill 2016, which has been tabled by Fianna Fáil finance spokesman Michael McGrath.
Michael Noonan has shown his preference for the banks over Irish citizens in the past so his objections to the bill hardly come as a surprise.
A vote on the proposed legislation is due to take place in the Dáil tonight.