The Committee on Finance, Public Expenditure and Reform has been considering the Keane Report on mortgage arrears. MABS, the Citizens Information Board and New Beginning were before the Committee.

Carol Dunne, from MABS, said a holistic solution to the arrears problem is required. She said most people really wanted to pay what they owed. She said there was concern in MABS about bringing in another layer, with the new agency mentioned in the report. She said a package of solutions was required and that there must be one that dealt with residual debt.

Yvonne Bogdanovic, of MABS, said the agency needed additional resources and that was its main issue. She also told the committee that MABS had not been consulted by the experts who wrote the Keane report.

She said clients dealing with debt feel vulnerable. She said she was not sure if the banks' behaviour could be called bullying, but she said many people felt intimidated by them.

She added that "a hungry belly" was the most important issue that MABS deals with.

Ms Bogdanovic said MABS believed there should be a degree of debt settlement, because there are too many people out there who will never get to the bottom of their debt.

Paddy Lavery, of MABS, said there was no one solution to the debt problems the agency sees, there were so many different factors in the cases that come to them.

Carol Dunne said she did not suggest that the Keane Report is skewed towards getting money back to banks, but that she felt it does not deal with the comprehensive nature of the average debt problem. She said most people have significant personal debt in addition to their mortgage.

FG deputy Michael Creed wanted to know what percentage of people presenting have unsustainable mortgages which will never be paid off.

MABS's Colette Bennett told the Committee that about 45% of the agency's clients were on social welfare income. She said MABS does not define unsustainable debt. In relation to prioritising debts, she said MABS is led by what the individual says is most important.

Paddy Lavery of MABS said the agency can get a good idea whether or not someone will ever be able to clear their debt, but he said this is not an easy thing to ascertain.

In this case, he said, the only pain the bank was taking was that it is not receiving interest on the "shelved" amount. Mr Maguire said this solution works because it is not reflected in the bank's balance sheet and therefore does not involve shareholders.

He also said it would revolutionise the approach to the arrears problem if the courts were allowed discretion in their rulings on debt, which at the moment is impossible.