Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I welcome the opportunity to speak on this important issue and I thank Deputy Coppinger for raising it.

The code of conduct on mortgage arrears, CCMA, provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long-term resolution is sought by lenders with each of their borrowers. It is essential that the code is fully implemented by all lenders and that borrowers are dealt with fairly in line with the code and that they can be confident that any breaches of the code will be swiftly identified and dealt with by the regulator.

The Central Bank, in its supervisory role, must ensure that the banks comply with the CCMA and take appropriate and timely actions to ensure that they do. The publication this morning of the findings of the Central Bank's themed inspection of lenders' compliance with the code is useful and timely in this regard and where weaknesses were identified by the Central Bank it is important that lenders address them immediately to the satisfaction of the Central Bank as the supervisory authority. The Government expects the Central Bank to use the powers available to it and to take whatever steps are necessary to ensure that all customers are protected. I note that the Central Bank has stated that it has the necessary powers to manage this process effectively and that it has undertaken to use its supervisory powers where compliance levels are not in line with the Central Bank's expectations.

It is essential that all lenders deal with their customers in accordance with the provisions of the CCMA and it is very disappointing when shortcomings are found. It is through the publication of the findings of such inspections by the Central Bank and rigorous follow-up with lenders by the Central Bank that any shortcomings are identified and resolved. That way we can be confident the code is fulfilling its objective of providing a strong consumer protection framework for distressed borrowers.

While obviously, and understandably, our focus is on the weaknesses found, which I and the Government see as utterly unacceptable, we should also note that the Central Bank found that the examined lenders have implemented frameworks as required by the CCMA and a number of good practices were identified that go beyond the minimum regulatory requirements. For instance, many lenders engage with borrowers and attempt to resolve arrears, even when borrowers have been classified as not co-operating by the lender and when legal proceedings have commenced.

The Government has put in place a broad strategy to address the problem of mortgage arrears. This has included an extensive suite of interventions designed to address the problem including specific Central Bank targets for the banks through the mortgage arrears resolution targets, MART, extensive recasting of the personal insolvency legislation, the mortgage-to-rent scheme and the provision of advice through Department of Social Protection-led initiatives, such as support through the money advice and budgeting network.

On 13 May last, the Government announced a number of new measures to further strengthen the framework to support mortgage holders who are in arrears. Building on action previously taken, the measures aim to increase the supports available to people in arrears and to increase the number of people availing of them. This further enhanced the personal insolvency framework, the mortgage to rent scheme and the services offered by the Money Advice & Budgeting Service, MABS.

In this context it is important to also recognise that the numbers of mortgage accounts in arrears is declining and that many home owners are reaching solutions with their lender. In its most recent statistical publication on this issue, the Central Bank reported that at the end of quarter one in 2015, over 117,000 principal dwelling houses, family homes, mortgage accounts were classified as restructured and the vast majority were meeting the terms of their current restructure arrangement.

I would like to assure the House that the Minister for Finance, I and the Government as a whole are acutely conscious of the impact of debt on families across the country and are determined to see it resolved. In these difficult circumstances borrowers must be dealt with in a fair and transparent manner and on a case-by-case basis. The CCMA is a central pillar in this regard and any shortcomings are not acceptable. The Central Bank has the powers to deal with these issues and having identified the weaknesses it is critical that it follows up in a speedy and strong manner to ensure that all lenders fully implement the CCMA to ensure that the best interests of consumers are protected.

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