Brian Lenihan Jnr (Dublin West, Fianna Fail)

The level of mortgage interest rates reflects a broad range of factors, including European Central Bank base rates, deposit rates, market funding costs, the competitive environment and an institution's overall funding. Decisions on the level of interest rates are taken autonomously by commercial lending institutions and are not subject to direction by the Minister for Finance.

I have already made my views known on the decision by Permanent TSB to increase variable interest rates by 0.5% with effect from last Monday. I repeat that I am disappointed by this decision. Unfortunately, the increase reflects commercial market realities, including the increased cost of accessing funds, notwithstanding the State guarantee.

A balance must be maintained by the Government between supporting banks through the bank guarantee scheme and other financial support incentives and broader policy objectives while at the same time ensuring that the daily running of these institutions recognises commercial realities. Interest rate increases will place a financial strain on some affected mortgage holders. Accordingly, in the revised programme for Government we have indicated that we will be introducing new measures to protect families having difficulties with their home mortgage payments, examining ways of expanding existing options available for dealing with debt and examining ways of expanding existing State-sponsored mortgage support measures.

I approved the setting up of the interdepartmental mortgage arrears review group, chaired by one of my officials for the purpose of bringing together all relevant information in the Departments and examining options, including initiatives in other jurisdictions, relating to support for home owners facing the problems of mortgage arrears and repossessions.

The Law Reform Commission, which is under the aegis of my colleague, the Minister for Justice, Equality and Law Reform, is addressing the issues of debt management and enforcement. In addition, I have discussed with Cabinet colleagues the broadening of the membership of the mortgage arrears review group and I will bring proposals to the Government in that regard.

On the position of mortgage holders generally, the Irish Bankers Federation published a statement of intent on 10 November 2009, agreed and supported by all federation members, which provides further reassurance to home owners genuinely unable to maintain mortgage repayments on their principal private residence.

Additional information not given on the floor of the House.

In addition, the IBF oversight committee on implementing the statement of intent includes representation from the Money Advice and Budgeting Service, MABS. This co-operative approach follows on from the IBF and MABS operational protocol on consumer debt, put into effect in September 2009, which will enable them to work together effectively when dealing with problems of personal debtors who approach the MABS service for assistance.

Other arrangements in place to assist consumers who have fallen into arrears or are in danger of falling into arrears include the mortgage interest supplement scheme, which provides assistance where the mortgage relates to a person's principal private residence, and MABS, which provides a national, free, confidential and independent scheme.

The Financial Regulator's consumer protection code requires that a regulated entity must contact the consumer as soon as it becomes aware that a mortgage account is in arrears and that it must have in place a procedure for handling accounts in arrears. The Financial Regulator also has in place a code of conduct on mortgage arrears which applies to mortgage lending activities to consumers in respect of their principal private residence in the State. This is mandatory for all mortgage lenders registered with the Financial Regulator.

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