Sinn Féin Cllr. Marie-Therese Gallagher said she fears that state regulations governing council loans are making it “near impossible” for applicants to access the loans.
Cllr. Gallagher brought forward a motion at Monday’s council meeting calling on the council to amend the policy regarding housing loans for less than 15,000 euro. In the past, council had issued unsecured loans to a maximum value of 15,000 euro.
But under revised 2009 loan regulations, each local authority was required to set up a credit committee to oversee council policy. The committee, in the current climate, decided that a charge should be secured on a property to the value of any housing-related loan advanced.
At Monday’s meeting, Cllr. Gallagher spoke of a couple with seven children who sought an 8,000 euro council loan for necessary roof repairs. The legal fees attached could cost up to 1,200 euro, she said.
If the family had that money, she said, “They wouldn’t come to the council for a loan in the first place.” And if the family is unable to secure the loan, the council would have to rehouse them at a far greater cost because the roof problems are making the house uninhabitable.
“To tell you the truth it just doesn’t make sense to me,” Cllr. Gallagher said. She said that she appreciated the seriousness of the economic crisis, but said, “I can guarantee everyone in this chamber that people who are looking to fix their windows or fix their roof did not cause the bloody mess this country is in.”
Fianna Fáil Cllr. Ciaran Brogan, who seconded the motion, said Cllr. Gallagher had demonstrated her passion for the subject. He said he had also come across a few cases in the past year of people who wanted to stay in their own homes but ended up in private rented accommodation because of loan criteria. “I think it’s very unfortunate,” he said.
Fine Gael Cllr. Bernard McGuinness also supported the motion but said he believed the council should have a legal office to deal with such money issues. Fianna Fáil Cllr. David Alcorn said there was “just an unbelievable amount of paperwork” attached to even a small grant.
Liam Ward, acting council director of service for housing and building services, said the 2009 regulations placed “quite significant obligations” on local authorities. He said the council was not in the business of issuing unsecured loans to any applicants, though he accepted that fees of 1,200 euro for a loan of a few thousand would be a cause for concern. However, Mr. Ward said he was confident that fees would be lower than that.
Cllr. Gallagher said she believed the council needed some kind of process, perhaps along the lines of a small banking mechanism, for small loans. “If I go to the majority of people who need their windows fixed and say it’s going to cost between 600 and 800 euro to get 2,000 euro of a loan, that’s going to put this message out: No, that’s not a good way to go,” she said.
Mr. Ward said he believed authority for small banking loans would have to come from the national level. But he took the councillor’s point about the size of fees in relation to small loans and said he would write to the minister.
Cllr. Gallagher said on Tuesday that she will not let the matter drop. She plans to raise a parliamentary question through the office of her party colleague, Pearse Doherty, TD, to determine the number of loans approved in Donegal in the past two years.
The councillor said she recognised state regulations have left local authorities in a difficult position, but said, “The whole policy just stinks at the minute when it comes to the most vulnerable people in our society.”