Minister must stop banks withdrawing mortgage approval from workers on wage subsidy scheme
Labour TD Ged Nash has called on the Minister for Finance to take urgent action to stop banks – particularly those in which the State holds a majority share – withdrawing mortgage approval from workers availing of the temporary wage subsidy scheme.
Deputy Nash said:
“I have recently been contacted by several constituents on the TWSS who have had their mortgage approval withdrawn or are being prevented from drawing down their mortgage.
“There is now a very real danger that they will lose out on their prospective home, lose their 10% mortgage deposit (which could average up to €34,000 in Dublin city, €28,000 in Cork City and €25,000 in Drogheda City) and in some cases could run the risk to be pushed into homelessness.
“It is not acceptable that those on the wage subsidy scheme are being punished through no fault of their own as a result of COVID-19 – people should not have to deal with this added uncertainty at a time of crisis.
“We have already seen a sharp drop-off in mortgage approvals of up to 10% in March, which will inevitably have a knock-on affect for areas like construction, particularly at a time when we need to urgently build more public, private and affordable”.
Nash continued:
“Let’s not forget that the State holds a significant shareholding in Permanent TSB (75%), AIB (71%) and Bank of Ireland (14%) – so it is completely unacceptable that these institutions would now leave thousands of people in the lurch.
“Banks, particularly those that are predominantly State-owned, should be serving the public interest rather than punishing people trying to buy their own home, many for the first-time.
The Minister for Finance has been fully aware of this issue for some time now. On May 20th, he stated in the Dáil ‘that participation in the wage subsidy scheme should not be a reason for treating an applicant in a different way’, after previously pledging to investigate this issue.
“However, it his high time that we move from words to firm action, and the Minister for Finance – as the majority shareholder on behalf of the Irish people – must urgently raise this issue directly with the banks in question and put a stop to this ongoing practice.
“The Minister must also remind such banks of their social obligations as we enter the next phase of this crisis. According to a recent NUIG study, nearly half of all repossessions are conducted by pillar banks – with one in every five mortgage cases alone being pursued by Permanent TSB.”