Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The Deputy will be aware that last week the Central Bank announced new measures to address mortgage arrears, including the publication of performance targets for the main mortgage banks and proposed changes to the code of conduct on mortgage arrears, CCMA. The consultation paper on the review of the CCMA includes a number of proposals intended to clarify and strengthen the resolution process for arrears cases.

Specific targets have been set by the Central Bank to require banks to work through their mortgage book systematically and to offer durable solutions to mortgage holders for arrears cases that are 90 days or more overdue. The Central Bank will also, over the coming period, set targets for the conclusion of durable solutions and for the sustainability of such solutions. The targets should provide a better measure of progress on a more consistent basis and promote a movement away from temporary forbearance measures which are not sustainable in the long term. In addition, the banks will also be set specific, non-public, targets, principally relating to handling of early arrears cases. The Central Bank is working with individual institutions to incorporate these measures which will be set in line with each institution's capacity, processes and systems. These targets will be adjusted quarterly to ensure they are ambitious.

The banks will be required to publish their performance against the targets for the year end December 2013 and make quarterly reports to the Central Bank. Banks are also required to make regular returns to the Central Bank on their performance against targets. The Central Bank will consider each bank's performance against the targets, including assessing whether sustainable solutions have been offered to customers.

Separately from this Central Bank action, the new personal insolvency system, in particular the new resolution frameworks provided for in the Personal Insolvency Act, will also shortly be available to borrowers who are in significant difficulty in their mortgage repayments. Utilising this process, the borrower will be in a position to consult an independent personal insolvency practitioner and where necessary to make a formal and realistic personal insolvency arrangement proposal to all eligible creditors, including a mortgage lender. In such a situation the creditors will be obliged to consider formally and vote on the arrangement as proposed by the debtor. In the event of a refusal by creditors, the debtor will also have access to the reformed bankruptcy framework, which has significantly reduced the automatic discharge period to three years. I also remind the Deputy that, under the mortgage advisory service developed by the Department of Social Protection, independent financial advice is available to borrowers who have been offered a long-term forbearance option by the lender and a panel of 2,000 to 2,500 qualified accountants is now in place to provide this service.

See this speech in context