MINISTER FOR Finance Brian Lenihan will bring proposals to Cabinet shortly paving the way for the setting up “within weeks” of an expert group to help those in debt and in mortgage arrears.
The department last night confirmed the independent group was given the green light at a meeting between Mr Lenihan and the Green Minister Eamon Ryan last Thursday.
The plan has also been discussed between Fianna Fáil and Green Party Ministers for months, Mr Ryan said in London yesterday.
The formation of the expert panel has now been designated a “priority matter” for the Government. Mr Ryan said it would be formed “within weeks”, if the Cabinet signs off on it, and said it would then offer “rolling recommendations over the next few months”.
Bankruptcy laws must be reformed, in line with commitments given in last October’s programme for government, he said, because the existing laws leave people in a limbo situation for up to 12 years.
Mr Ryan was in London for meetings with his British counterpart Ben Bradshaw.
The confirmation came after some confusion had arisen since the weekend about the status of the proposed group and as to whether it has been given Government approval or not. The Department of Finance said on Sunday the Cabinet had not considered proposals on the matter to date.
While formal Government approval has not yet been given for the group, The Irish Timesunderstands that Mr Lenihan had agreed on foot of his meeting with Mr Ryan to bring the proposal forward for Government approval. It is likely that a memo will be presented at next Tuesday's meeting of Cabinet.
Mr Ryan, the Minister for Communications, may also bring the matter up as a non-agenda item with his ministerial colleagues today.
The revised programme for government, approved last October, included two measures to help protect family homes and to help those who fall into unmanageable debt. The measures were included at the insistence of the Green Party in return for its support of Nama.
The protections were targeted at families having difficulties with their home mortgage payments. The options included reduced rates, longer maturity dates, rolling-up of interest, banks taking equity in homes and lease-back arrangements.
The programme promised regulation of debt collection agencies; new personal insolvency regulations and the setting up of a new Debt Enforcement Office.
Shortly after the programme was approved, the Government set up an interdepartmental group with a mandate to review arrangements on mortgage arrears. However, the Greens argued since last autumn that the only effective means of dealing with the problem would be to set up a high-level, expert group, independent of Government, instead.
Mr Ryan said yesterday: “What we don’t want are people who are caught at the end of the Celtic Tiger getting into debt problems that put them into trouble for the next 10 years. Our current system of managing default is archaic, inefficient and doesn’t benefit anyone.
“If we are to get a recovery ... we need people who are caught in a legacy of debt default to get out of it.”
In his discussions with Mr Lenihan, Mr Ryan is understood to have said that the group should be comprised of representatives of the Irish Bankers Federation, legal experts, the Money Advice and Budgeting Services, and the Departments of Finance, Justice, and Social and Family Affairs.
The proposal to be brought to Government for approval will include the names of possible group members.
Opposition parties dismissed the proposal as a political gimmick. Fine Gael’s housing spokesman Terence Flanagan said it was “little more than hot air”.