Mr. Brian Hayes:

I thank the committee for the opportunity to be here today. I am joined by my colleague Ms Michelle Byrne, who is head of consumer banking in BPFI.

I will begin by acknowledging the appalling situation faced by homeowners, through no fault of their own, due to the presence of defective concrete blocks in their homes. The BPFI and its members reiterate their commitment to supporting these homeowners, where possible, and to continue to engage proactively on issues where the banking sector has a role to play and where we believe we can make a positive contribution.

At an industry level, the BPFI has been working on an ongoing basis with our members and stakeholders to consider any constructive solutions that might be appropriate. In the past 12 months in particular, we have engaged with a wide variety of external stakeholders, most importantly, from our perspective, with homeowners, especially through the redress focus group on banking and insurance, which we have met eight times in the past 11 months. We greatly appreciate their engagement and hard work as a voluntary group in putting all of these issues on the table for us. We have also cited in our submission all of the other stakeholders we are involved with.

We were asked to do four things by the homeowners. The first was to bring some certainly from an industry perspective on mortgageability, the second was to clarify what we would describe as the damage default clause and the third was to submit a proposal for interim funding to the Department of housing. We have hosted an information session for elected representatives, some of whom have attended our head office to discuss the proposal.

On the fourth issue, in July last year, the BPFI requested the establishment of an oversight committee by the Department of housing to oversee implementation of the enhanced defective concrete blocks grant scheme and to address any issues that might arise. In a very welcome development, the Department of housing hosted the first meeting of the implementation steering subgroup in January and a follow-up meeting last week. This forum is of the utmost importance to the implementation of the grant scheme and to provide a forum for all stakeholders to engage in one group. We believe it is of critical importance that the Department of housing continues with the subgroup to give assurances of its commitment to continue engagement through the forum.

I will now deal with the three specific issues which the committee asked us to address. Last December, the BPFI made available to relevant stakeholders its position on mortgageability. This confirmed that the members, that is, AIB, EBS, Haven, Bank of Ireland and PTSB, have a willingness to lend based on the certification and professional opinion provided by others in the conveyancing process, as per the standard process by which mortgages are approved. This position is confirmed in respect of all of the remediation options, Nos. 1 to 5, under the grant scheme. It also applies to the future sale of remediated properties, to the switching of mortgages attached to remediated properties and to future top-ups.

Considering a recent statement by the Mica Action Group and the publication of a research update regarding the review of IS 465, the BPFI and our members await a formal response from the Department of housing in relation to this aspect of the scheme. We note the content of the update and the concerns raised in relation to the impact of defective materials on the foundations and in retained blockwork. Concerns have existed for some time regarding the review of IS 465. We respectfully suggest to the committee that the work of the National Standards Authority of Ireland in this matter is now critical.

The second issue concerns bank financing. During the engagement with our friends from the redress focus group, a potential challenge was identified with funding the commencement of remediation works prior to receipt of the first grant payment. Last September, the BPFI and its members submitted a proposal for an interim funding mechanism to the Department of housing for its consideration. In the proposal, we outlined an approach whereby a certain percentage of the amount approved under the grant scheme would be made available to the homeowner to fund upfront costs.

Last week, we were informed by the Department of housing that it is working to finalise the details of a process that would allow for earlier access to funds approved under the grant scheme. We very much welcome the Department’s work to permit earlier access to funds, which is a more effective solution for impacted homeowners. We understand a commitment was made by the Department of housing to bilaterally discuss this new approach directly with affected residents and we welcome this engagement.

The third issue is in respect of properties impacted by defective blocks. There is a clear desire across Ireland’s lenders to support and work with customers to find solutions. It should be noted at this point, however, that, to date, the volume of customers coming forward to our members remains quite low, with just over 370 having engaged with the three retail banks. Examples of how members have supported customers include the establishment of dedicated specialist teams which have been designated as points of contact, both centrally and at a local level, and concentrated in the counties that are currently within the scope of the grant scheme. Specific procedures are in place to ensure that impacted homeowners are supported in line with their individual needs. Our members are ensuring that front-line staff are fully and sensitively trained to work with impacted homeowners, which has included the training of front-line staff by vulnerable customer experts. They are also working with customers on a case-by-case basis and mindful of their individual circumstances. Members have provided credit to fund remediation works.

We recognise the significant challenge for affected homeowners and believe continued engagement and constructive dialogue between stakeholders is imperative to move this issue forward. The banking sector is just one player of many in the overall process, which includes the National Standards Authority of Ireland, solicitors, valuers, surveyors, the construction sector, local authorities and others. We urge the committee to consider seeking the view of all those who have a role to play in getting the best possible outcome for impacted homeowners. We would be happy to take any questions.