You should put pressure on your TD to get action

If you are affected by the high Standard Variable Rates you should get onto your TD and ask them to speak in the Dail on this debate tonight.

Better still come along to the Dail and watch the Minister's response.

There will be no action, unless the TDs think it is an issue.

Brendan

I also wrote to all the TDs in my constituency yesterday on this. Nothing back as yet. Nothing will change until enough people express their annoyance and frustration. We're told there are around 300,000 variable rate mortgage customers? That would be a voice that would be very difficult to ignore if this issue could be kept in the headlines.

Would anyone have a template of a letter they sent to their local T.D's that they could PM me. Would like to see what I should be putting in a letter to highlight this issue.

Some version of the following:

Dear TD

We are a customer of [ ptsb] and we have a mortgage of [200,000] on our home. We are paying a rate of 4.5%. The average rate in the rest of the eurozone is around 2.5% so we are paying €4,000 or €350 per month.

This is a state owned bank which is being recaplitalised at my expense.

The effect this is having on my family is as follows:


What makes this most insulting is that a new customer with my LTV can get a rate of [3.8%] I can't switch to another lender because [I had arrears for a period after I lost my job]

It is very frustrating for me that the Minister for Finance says it's none of his business. He will talk to the Central Bank about it. But the Central Bank has been publishing misleading figures on the mortgage rates for some time, so they are not to be trusted.

The Competition and Consumer Protection Council says it's not a priority for them.

I ask you to put pressure on the Minister for Finance to call in the Chief Executives of the lenders and insist that they reduce interest rates towards the rates in the rest of the Eurozone.

The Minister should tell the banks that if they do not comply, that he will reluctantly introduce measures to give the Central BAnk the power to set a maximum mortgage rate in exceptional circumstances. And the plight of 300,000 variable rate mortgages holders counts as exceptional circumstances.

I too wrote to my TD's yesterday and got one reply from 8 (Mary Mitchell O'Connor's secretary).

hughes said:

I wrote to my local TD who said it was not a political matter and that the Government had no role. .....still cannot believe this response

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Hughes , Suggestion.

Write back to your Td as follows.
Dear Mr TD,
I am in receipt of your response on SVR rates not being a Political matter.

.Most constituent issues are not Political Matters ,yet you attend to them.
From my view; it was (Political) when Td,s used my money to bail out the Banks.
So please give me a better response.
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2. I think you in having that letter should name that TD in AAM.

I believe that when we hold actual evidence of such a response , that TD deserves naming.

I have some major reservations about this issue. While accepting that the variable rates are comparatively high, there is no evidence of a Cartel being operated by the Banks. The rates are competitive in so far as it is open to any bank to offer a lower rate to attract business. The fact that no existing bank is doing this and no new competitor is rushing into the market to provide such competition speaks for itself. I.e. that the international banking sector remains wary of the Irish market.
Whilst I do have sympathy for those on "comparatively" high SV rates the difficulties with Government interference in this market are clear. How can we ever hope to attract new players into this market if the Government imposes restrictions on rates that can be charged? The restrictions already being imposed by CCMA are resulting in banks losing the ability to enforce their security and in addition losing the ability to impose penalty rates to those not in compliance with their loan agreements.
like it or not, banks are businesses and are in the market to make profits. The only way to resolve this issue in my opinion is to make Ireland an attractive market for foreign competitor banks. As in more competition, more demand will lead to lower prices. Government restrictions and Government interference in an open market invariably causes problems. By all means encourage TD's to lobby the sector, but price legislation is not the answer to this issue.

It's easy to have such objectivity when you are not impacted by rates which you refer to as 'comparatively' high. 'Comparatively' high rates would be in the region of 5% - 10%, when in fact they are twice what they should be.

Brendan 44,

I have no issue over what SVR rates are charged on new mortgages.

I do have an issue , when the current good SVR payers are being penalised.
It was clear that when customers took out SVR,s that Rates would largely move in line with Cost of Funds.

{government interference} worries you,
That is a sensible view, however did government not interfere (with our money) when Banks were bailed out?
Would it not appear that the good payers are taking a 2nd hit!

The issue over non payers and Banks ability to enforce Repos etc is not the fault of current good SVR payers.
To overcharge good SVR payers is simply wrong.

100% agree with you Gerry. I am astounded at the flexibility that SVR contracts give to the Banks to increase rates at a whim!! In my opinion that is where the Government/TD focus should be as such contracts appear to be totally biased against the consumer.

Banks are charging these rates because they can, or and have been allowed to get away with it. They were the prodigal sons wrapped in cotton wool by the Government and regulator for too long, meanwhile they are bullying customers.
The same money that costs 2.5% in Belgium is 4.5% in Ireland? "That's coz poor Ireland is different and we has problems and we better not go too mad with the rates coz god knows what that will lead to". Nonsense.
There is no argument, whether repossession barriers, tracker subsidisation, "Irish market risk", discouraging of new entrants or market intervention (hilarious to even suggest after years of nationalisation, IBRC, NAMA) that can justify a commercial cartel being allowed to fleece customers in full public view. The market is a basket case with most of the SVR holders unable to switch anyway due to negative equity, and new buyers given little option but to swallow high rates. The banks are sucking money out of the economy that could be a massive boost to disposable income and economic growth.
New entrants are not a panacea either. Shall we ask Ken Bates to return and set up Irish Trust Bank mark II? RBS went into Ireland via UB, got burnt. Halifax came, got burnt. Danske have buggered off. Rabo got burnt with ACC Bank, giving up their license. Barclays has been here since the 1970s, they aren’t interested. A German state went bankrupt because of a German bank's Irish subsidiary, good luck persuading shareholders Ireland is a good idea. There is a mountain of financial regulation in play or on the way, big banks have enough to deal with to be interested in fixing Ireland's problems. Even a major new entrant wouldn’t hold a candle to the three largest state owned banks in terms of impact with their bricks and mortar branch network and they wouldn’t touch negative equity account holders anyway.
It’s nonsense that the CBI can tell banks how to lend and set loan limits, but not even opine on the interest rate. As for the Government, this is commercial activity taking place within the state, hugely impacting the lives of their constituents and it is absolutely their business. It should be a major election issue.
Well done to everyone who has brought attention to this scandal.

There are a lot of people in denial over the reasons Banks can and do charge high SVRs - that is the lack of repossessions.

Why would any bank such as Santander consider entering the Irish market when they wouldn't be able to enforce security on the asset.

It is well documented that repossessions rates in Ireland are minuscule compared to what they should be. There is no justification for this - instead of the wailing and gnashing of teeth why don't people get angry with the Debt Forgiveness champions like the IMHO who think that banks can just forgive debt without damaging their balance sheets.

The fake populist rage is reminiscent of the worst of the bubble

futures said:

There are a lot of people in denial over the reasons Banks can and do charge high SVRs - that is the lack of repossessions.

Why would any bank such as Santander consider entering the Irish market when they wouldn't be able to enforce security on the asset.

It is well documented that repossessions rates in Ireland are minuscule compared to what they should be. There is no justification for this - instead of the wailing and gnashing of teeth why don't people get angry with the Debt Forgiveness champions like the IMHO who think that banks can just forgive debt without damaging their balance sheets.

The fake populist rage is reminiscent of the worst of the bubble

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Futures ,

You are probably correct in your reasoning as to why other Banks will not come into Ireland.
To state that the Reason Banks screw good payers on Svrs and charge high rates has little to do with Repos.
If you read linked threads on this SVR issue you will inevitably come to a much more nuanced conclusion.

1. Banks over-charge because they can (notwithstanding it was always clearly understood SVRs would follow market rates)
2. If you accept the above , in laymans terms Banks are sneaky and devious, lets be blunt they are thieves.
3.I do not agree with IMHO on all things, but it appears to me that mostly they are on the correct track. I see little sign of {debt-forgiveness-champions}.What I see are people outside of government/banking fraternities, offering ideas.
4. I have sympathy with your fake {populist} rage, if experience has taught me anything it is that these populist-howlers look for magic tree money.

I find it a bit depressing that we get forced into a them debt forgivers v bank apologists.
It means that solutions get harder to find and positions get entrenched.

This issue is too important to turn in to an Anti Reposession league Vs High SVR Deniers, money is being taken out of peoples pockets and there is no justification for it. A lot about the Irish Banking system and legislation needs to be fixed, including reposessions, but waiting for a bank to come rescue the market is not an option either. Folks that are paying their mortgages at these rates are not looking for handouts or magic tree money, just fair treatment. SVR holders (including myself) have a lot at stake in this matter so you can understand reading people's tupence worth defending the rates is infuriating.

Gerry Canning said:

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Futures ,

You are probably correct in your reasoning as to why other Banks will not come into Ireland.
To state that the Reason Banks screw good payers on Svrs and charge high rates has little to do with Repos.
If you read linked threads on this SVR issue you will inevitably come to a much more nuanced conclusion.

1. Banks over-charge because they can (notwithstanding it was always clearly understood SVRs would follow market rates)
2. If you accept the above , in laymans terms Banks are sneaky and devious, lets be blunt they are thieves.
3.I do not agree with IMHO on all things, but it appears to me that mostly they are on the correct track. I see little sign of {debt-forgiveness-champions}.What I see are people outside of government/banking fraternities, offering ideas.
4. I have sympathy with your fake {populist} rage, if experience has taught me anything it is that these populist-howlers look for magic tree money.

I find it a bit depressing that we get forced into a them debt forgivers v bank apologists.
It means that solutions get harder to find and positions get entrenched.

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I resent that you imply I am a bank apologist because I point out the logic at play in the Irish mortgage market.
Lets look at this from an economic perspective - one that is governed by incentives:

* Banks over change because they can.

* They CAN overcharge because there is ZERO likelihood for new Entrants into the market that would undercut them

*There is ZERO chance of new entrants because Repos are nigh on impossible.

Yes banks are sneaky and devious - just like politicians and just like the IMHO and the like who think the magic money tree will replenish the banks balance sheets from the arrears.

Just because they are devious doesn't make them immune to the basics of accounting.

jathclare said:

This issue is too important to turn in to an Anti Reposession league Vs High SVR Deniers, money is being taken out of peoples pockets and there is no justification for it. A lot about the Irish Banking system and legislation needs to be fixed, including reposessions, but waiting for a bank to come rescue the market is not an option either. Folks that are paying their mortgages at these rates are not looking for handouts or magic tree money, just fair treatment. SVR holders (including myself) have a lot at stake in this matter so you can understand reading people's tupence worth defending the rates is infuriating.

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defending rates? Who is defending rates. They are immoral, just as immoral as the behaviour as the can pay but won't pay brigade.

There would be no need for the rates if there were repos like a normal country. Pretending otherwise is a bit Irish.

Futures;

Wasn,t meaning to have you sound like a Bank Apologist.
That was a GENERAL comment .

Hope you can take on board , that I accept your logic.

Again, I find AAM posters are largely in agreement.
The only disagreement seems to be in splitting
1. The unreasonableness of Banks position.
2. The Logic/their economic sense in so doing.

The logic or reasoning why and how Banks overcharge does not excuse or take away from the patent unfairness of high SVr rates on good payers.

Thanks for the template Brendan, I just sent a mail to my local TD!

Brendan, what is your sense of whether this is really becoming a live issue for TDs in terms of pressure from constituents etc?