This week is a “very poor week for Irish banking”, according to an organisation which provides free legal representation for mortgage holders in arrears.
Vincent Martin co-founder of New Beginning said the new insolvency regime “is the only comfort” this week because it will provide “a chance for ordinary debtors to recover”.
Some three quarters of mortgage holders in arrears for in excess of 90 days have yet to have any restructuring on their loans, it has been revealed.
And meanwhile, fears are growing that Ireland could see a hike in banking fees and charges following the decision by Danske Bank to pull the plug on its Irish operations, alongside ACC Bank.
Mr Martin said: “For three quarters of those in arrears, there has been no restructuring whatsoever.”
“It’s the banks that have failed to grasp the situation; they largely caused it and they added insult to injury by their obstinate refusal to try and resolve it and provide sustainable solutions.”
An independent Insolvency Service of Ireland will now oversee and operate the new personal insolvency system, which deals with the personal debts of individuals.
“The insolvency regime is the answer here and it will present potential hope to mortgage holders who have been hammered by the banks for the last five and a half years.”
As part of a restructuring plan for Ulster Bank, RBS has announced it will create an internal “bad bank” where it will move as much as €47billion worth of so-called “toxic assets”, largely from the Irish bank.
Mr Martin said he was concerned about a breakdown in competition in Irish banking which could develop.
“What assurances have people going forward who are already financially stressed about more credit availability, higher interest rates, more charges, more fees – that’s what happens when competition breaks down.”
He questioned if the government has made representations to the banks “to provide safeguards to the ordinary customers against any exploitation of the market”.
However, he said “on a fair note… at long last…we now have an independent statutory body providing insolvency services in this country.”