February 16, 2024
Vulture fund loophole that denies thousands of mortgage holders access to the Financial Ombudsman must be closed – Pearse Doherty TD

Sinn Féin spokesperson on Finance and TD for Donegal, Pearse Doherty, has called for a loophole in legislation, that denies thousands of mortgage holders with loans held by vulture funds access to the Financial Services and Pensions Ombudsman, to be closed.

The Donegal TD raised the issue with the Minister for Finance in the Dáil last week and with the Governor of the Central Bank at the Finance Committee on Wednesday.

Speaking today, Teachta Doherty said:

“There is a loophole in the legislation which I raised with the Minister for Finance in the Dáil last week which means that thousands of mortgage holders cannot make complaints against vulture funds to the Financial Ombudsman.

“This means that even where there was wrongdoing, or a mortgage holder was mistreated, the Ombudsman cannot even investigate the complaint or require the vulture fund to pay compensation to the consumer for misconduct.

“This is a basic right which every consumer and mortgage holder should have.

“Access to the Financial Ombudsman is a key part of the consumer protection framework – allowing consumers to make complaints and receive compensation for the conduct of banks and other financial service providers.

“For years government ministers have claimed that mortgage holders who had their loans sold to vulture funds would keep all and lose none of the consumer protections that they had when their loans were held by retail banks.

“That is not the case.

“Last week, I made clear to the government that this loophole must be closed.

“On Wednesday I raised this serious consumer protection gap with the Central Bank during the Finance Committee.

“I welcome the fact that the Central Bank agree that this gap must be closed.

“Yesterday in the Dáil the Minister for Finance acknowledged the problem which I have raised.

“What is now required is that this loophole is closed without delay.

“I also raised the fact that, because of further gaps in law, vulture funds are now evading regulation by transferring the legal title of mortgages to the firms that manage the mortgages on their behalf, despite the fact that they are the true owners of these loans.

“Mortgage holders who had their loans sold to vulture funds have continually been let down by Fine Gael and Fianna Fáil, and I am determined to close these loopholes to ensure that they have full and equal access to the Financial Ombudsman.”

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