Mary Hanafin (Dún Laoghaire, Fianna Fail)

The Money Advice and Budgeting Service, MABS, provides assistance to people who are over-indebted and need help and advice in coping with debt problems. The regulation of financial institutions, including the banks, sub-prime mortgage lenders and the credit unions, is part of the statutory remit of the Financial Regulator. Legislative issues in regard to the Financial Regulator are dealt with by the Minister for Finance.

Under the statutory code of conduct on mortgage arrears published by the Financial Regulator, all financial institutions, including the banks and sub-prime mortgage lenders, must, where circumstances warrant it, refer a borrower in difficulty for guidance to his or her local MABS office or an appropriate alternative.

The new protocol, IBF-MABS Operational Protocol: Working Together to Manage Debt, is the result of almost two years of work by MABS NDL, the national support company for the MABS network and the Irish Banking Federation, IBF, the main representative body for the banking and financial services sector. The protocol sets out an agreed process by which IBF members and the MABS money advisers will approach debt problems experienced by clients. The protocol includes a commitment that no legal action will be taken as long as there is compliance by the client with an agreed repayment plan. Thirteen financial institutions, including the main banks and building societies, have to date signed up to the protocol.

With regard to those other lenders that are not members of the IBF, such as sub-prime mortgage lenders, the MABS advisers will continue to negotiate with these creditors on an individual basis to secure better terms for MABS clients in managing the repayment of the debts.

I am encouraged by the response to the MABS-IBF initiative and the willingness of lenders, not just those who are members of the IBF, to support the protocol. In the subsequent media reports and correspondence I received, other lenders have indicated that they would be happy to support the protocol. I urge all lenders to adhere to the best-practice procedures set out in the protocol. I have asked MABS NDL to follow up on the correspondence I have received and to explore further the possibilities for other lenders.

MABS NDL has initiated work with the Irish League of Credit Unions with a view to developing a similar operating protocol with its members that would set out best practice to support MABS clients in managing debts owed to credit unions.

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