Fianna Fáil’s spokesperson on finance Michael McGrath has warned that the Covid-19 crisis will have a major and longlasting impact on the economy.
He made the comments after the five banks in the Republic of Ireland committed to offering a three-month payment holiday for various customers affected by current crisis.
In a statement, the Banking Payments Federation Ireland said the measures include “a payment break up to three months for business and personal customers affected by Covid-19, to be followed by ongoing reviews depending on the scale and extent of the situation.
“Customers wishing to avail of a payment break should contact their respective bank,” the statement added.
BPFI chief executive Brian Hayes said: “These are exceptional circumstances in which people now find themselves and we believe they require exceptional measures.
“The banks are moving urgently to introduce measures that will best support businesses and personal customers impacted by the Covid-19 crisis.
“They will also require the full support of key stakeholders in order to make it happen”.
Mr McGrath welcomed the announcement from the BPFI, but said the process for those looking to avail of payment breaks needs to be a simple one.
“I welcome the very necessary measures which have been introduced, but I think the key thing for borrowers seeking to avail of payment breaks is that the process needs to be straightforward and that the applications need to be approved quickly,” he said.
“The last thing people need during this stressful time is lengthy, complex forms.”
Whilst the five main banks have agreed the freeze, so-called vulture funds have given no such commitment.
Mr McGrath called for homeowners with mortgages bought by vulture funds to be protected, stating that it is “a key issue that the minister needs to focus on”.
He also warned that the country will be feeling the economic repercussions of the current crisis long after the immediate threat has passed.
“The cost of tackling Covid-19 will be enormous, as we first have the cost of tackling the virus, but then we also have to try and refloat the economy afterwards,” he said.
“I would envisage that the bill will be many billions of euro, but this has to be done and we will bounce back.
“Bold measures have to be taken, but we will be able to recover.”
Yesterday, finance minister Paschal Donohoe also asked the banking industry to increase the limit on contactless payments from €30 to €50.
The minister is also deferring the collection of stamp duty on credit cards to July. This is normally levied in April.
Landlords with tenants who are out of work due to the coronavirus outbreak will also be able to avail of the payment break of up to three months, while banks will ensure a wide range of credit, cash flow, and supply-chain supports are also offered to businesses that need them.
Mr Donohoe said if any landlord avails of the flexibility being afforded by the banks, they should not use it to evict tenants.
“Landlords with buy-to-let mortgages cannot and should not evict tenants,” he said.
But he said the Government does not have any power to stop landlords evicting tenants amid the Covid-19 outbreak.
A Cork TD had called for evictions to be banned immediately, however.
Sinn Féin’s Thomas Gould said that it should be done as a matter of urgency as he has been contacted by “a lot of people who are extremely worried as they have been issued with a notice to quit by their landlords.”
When asked if the Government can stop landlords evicting tenants, Mr Donohoe said: “There are legal constraints in place in relation to the ability of any Government to intervene in the contract between landlord and tenant.”
He urged landlords to have compassion for tenants and to not exploit the crisis.
“For any landlord to use the crisis in a way to treat tenants in a way that is not fair to them is not acceptable to broader society and will raise concerns,” he stated.
Mr Gould said that people are fearful they will not be able to secure alternative accommodation, and could find themselves homeless as a result.
“We also don’t want a situation where people end up moving in with their families due to the obvious dangers from overcrowding,” said Mr Gould.
“The minister needs to bear in mind that renters were struggling with high rental costs before this crisis and the situation will worsen if there are jobs losses, temporary or other, in the household.”
Mr Gould also called on the minister to ensure that people who need access to an emergency rent supplement payment can do so easily, including those who have not ever done so before.
“I am already seeing that reality, with many constituents contacting my office in a panic about what could happen to them and their families,” he said.
“If we are all in this together, then it must include renters.”