Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

There was only one set of guidelines. They have never changed. I hope the Minister accepts that. Clarification was provided during different periods. The Minister is right to say I wrote to the Central Bank on 11 June. I asked in my letter why Belgium and Spain were able to waive interest rates for consumers in those jurisdictions, while working to the same EBA guidelines. I knew the answer but I wanted it in writing so I could show the Minister and others that this did not need to happen. How did I know the answer? I knew it because I had engaged with the Central Bank before that. We have had conversations on this issue with the Governor of the Central Bank and we have looked at what has happened in other jurisdictions.

We have also looked at the EBA guidelines of 2 April, selections from which the Minister read out, and the guidance that was provided on this issue on 25 March by the European Securities and Markets Authority, ESMA, which included a clarification that it was not necessary for interest to accrue. The Minister knows that because his colleagues in Spain and Belgium do not require interest to be charged, particularly in Belgium, on low-interest loans.

What is the Minister's view of the fact that the CEO of KBC Bank sat at the meeting with the Minister and the Taoiseach where the chief executive officers of the main pillar banks said that interest must be charged, as required by the regulator? They said this approach was required to prevent a loan from being considered as going into default. The AIB representative said the risk was clear that if interest was not charged, there would be a default and there would be a credit rating on the customer. The CEO of KBC Bank sat at that meeting. KBC Bank operates in Belgium, where for low-interest customers with low incomes, interest is not charged during the payment breaks. That is done under the exact same guidance the Irish pillar banks received, namely, the EBA guidelines that were issued on 2 April and the clarification that was issued on 25 March by the ESMA. How can the Minister justify that? More important is the fact that Permanent TSB, a State-owned bank, has made it very clear that if a customer takes a six-month break on a €250,000 mortgage without an extension of the term, the bank will charge that customer an additional €6,300. How can the Minister for Finance, who holds the majority shareholding in that bank on behalf of the Irish people, tolerate such practice?

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