Shane McEntee (Meath East, Fine Gael)

I have taken on board everything the Deputy stated and I promise to forward the details to the relevant authorities. Approximately two years ago, I was gob-smacked when discovered the number of people and entities that were in a position to give out mortgages and the number of individuals who simply did not know what type of mortgage they had taken out.

The Central Bank of Ireland has overall responsibility for authorising, regulating and supervising regulated financial service providers. In terms of the provision of mortgages, this includes the regulation of credit institutions - such as banks - retail credit firms and home reversions schemes. A retail credit firm is one which provides credit in the form of cash loans directly to individuals under the Consumer Credit Act 1995. A home reversion scheme is where a consumer agrees to sell a share of his or her home in return for a set price. The Central Bank provides a register of regulated financial service providers on its website www.centralbank.ie. In addition to the requirement to be authorised, mortgage providers are subject to a range of supervision and enforcement provisions set out in statute, including the Central Bank Acts 1942 to 2011. There are a number of other requirements to which mortgage providers are subject, including the code of conduct on mortgage arrears; the consumer protection code; and the Central Bank fitness and probity regime.

A number of measures have been already put in place to protect mortgage holders who are experiencing difficulty with their mortgage repayments. These include the Central Bank code of conduct on mortgage arrears which, among other things, requires each lender to put in place a mortgage arrears resolution process. It also provides that a lender must make every reasonable effort to agree an alternative payment arrangement with a co-operating borrower who is experiencing mortgage difficulties and places a moratorium on legal action by banks against co-operating borrowers.

In its report published last autumn, the interdepartmental group on mortgage arrears concluded that the mortgage problem is complex and that in some cases a response other than a forbearance approach will be required. In particular, it stated that a range of practical solutions tailored to individual circumstances will need to be developed and deployed for people in most need. The Government has accepted the recommendations in the Keane report which relate to this area and has put in place a special committee to ensure a high priority is assigned to their implementation across relevant Departments and agencies. Under the consumer protection code, a regulated entity must ensure that in all its dealings with customers and in the context of its authorisation it acts honestly, fairly and professionally in the best interests of its customers and the integrity of the market; acts with due skill, care and diligence in the best interests of its customers; does not recklessly, negligently or deliberately mislead a customer as to the real or perceived advantages or disadvantages of any product or service; does not exert undue pressure or influence on a customer; ensures any outsourced activity complies with the requirements of the code which also sets out a range of more detailed provisions relating to mortgages.

The Central Bank Reform Act 2010 gave effect to the new fitness and probity regime being introduced on a phased basis by the Central Bank. Under the new regime, the Central Bank may refuse to approve a proposed appointment to a pre-approval controlled function where it is of the opinion that the proposed appointee is not of such fitness and probity as are appropriate to perform the relevant function. The Central Bank, as part of its role in the ongoing supervision of the financial services sector, may from time to time consider there is reason to suspect the fitness and probity of a person performing a controlled function and may commence an investigation into that person. Under the fitness and probity regime, a person must be able to demonstrate, among other things, that his or her ability to perform the relevant function is not adversely affected to a material degree where he or she has, in any jurisdiction, been convicted of an offence either of money laundering or terrorist financing, or has had a finding, judgment or order made against him or her involving fraud, misrepresentation, dishonesty or breach of trust.

Following on from the Central Bank Reform Act 2010, the Central Bank (Supervision and Enforcement) Bill 2011 was published in July 2011. That Bill draws on the lessons of the recent past in Ireland and abroad and further enhances and strengthens the Central Bank's regulatory powers to impose and supervise compliance with regulatory requirements and undertake timely prudential interventions. The Bill contains a range of provisions that will enhance the protection of consumers. Further provisions have been proposed for Committee Stage which are the subject of a public consultation process.

The Government has brought forward several reforms to improve the regulatory system. The provision of mortgages and the protection of consumers remain a core focus of the Government's attention. The Central Bank continues to work with the Department of Finance and other stakeholders to deal with difficulties that arise on the ground and bring forward meaningful proposals to ensure mortgage holders are dealt with in a fair, honest and professional manner.

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