Michael McGrath's mortgage bill "not unconstitutional".

Discussion in 'The Fair Mortgage Rates Campaign' started by Brendan Burgess, Jan 21, 2017.

  1. Brendan Burgess

    Brendan Burgess Founder

    The Oireachtas Finance Committee has been given legal advice that the Bill is not unconstitutional according to an article by Charlie Weston in today's Indo.

    Mortgage rate caps to be enacted in law by the summer

    The bill is currently going through pre-legislation scrutiny by an Oireachtas Committee because of the fears it could contravene the Constitution.

    But committee member Michael McGrath of Fianna Fáil, who prompted the bill, said lengthy legal advice has been received by the committee dismissing these fears.

    "It is a lengthy piece of legal advice, but it pretty much gives the legislation a clean bill of health.

    "This means the Central Bank (Variable Rate Mortgages) Bill has cleared one of its big hurdles.

    The Central Bank does not see as its role the assessing of rates to find out what would an appropriate variable rate.

    Mr McGrath said he is considering an amendment to the bill that would see an appropriate rate, or a cap, set out in the legislation, as a way of dealing with the Central Bank's objections to the bill.

    stefg and tommyryan55 like this.
  2. Sarenco

    Sarenco Frequent Poster

    Last edited: Jan 21, 2017
    Hi Brendan

    I am delighted to see that you no longer think it is a good idea to give price fixing powers to the Central Bank.

    However, I would have thought that the events of the recent credit crunch adequately demonstrated why it is unsafe to tie mortgage rates directly to the ECB refi rate (as opposed to, say, 12-month EURIBOR).

    I'm also not sure that introducing different caps for different LTVs is really practical or fair to existing borrowers in NE or with limited home equity.

    Otherwise, I wouldn't have a problem with your new proposal.

    In practical terms, it gets you pretty much to the same place as my suggested formula for a statutory cap (133% of the average rate on all outstanding mortgages (including trackers) in the preceding quarter).
    Last edited: Jan 21, 2017