Patrick O'Donovan (Limerick County, Fine Gael) | Oireachtas source

I apologise on behalf of the Minister, Deputy Donohoe, and the Minister of State, Deputy Fleming, who, unfortunately, cannot be here today.

Covid-19 has had a significant impact on many households and businesses, and the banks and other regulated lenders moved quickly to provide support to their impacted mortgage and other borrowers by putting in place payment breaks across the industry. The latest figures from the Banking and Payments Federation Ireland, BPFI, indicates that around 89,000 payment breaks were granted to mortgage customers, and breaks were also put in place for 32,000 SMEs and 4,000 corporate borrowers.

It is to be welcomed that some of the borrowers who had a payment break have now been able to resume loan repayments. Central Bank and BPFI data indicate that over 90% of borrowers that have finished a payment break have returned to full repayments on the existing terms. However, it is important that lenders continue to liaise and work with borrowers who are in a position to resume loan repayments and that flexible repayment arrangements are provided as necessary. In that regard, the BPFI has indicated that the broad repayment options for borrowers who can recommence loan repayments following a Covid-19 payment break are either to return to repayments over the existing term of the mortgage or loan or to extend the term of the loan to allow the borrower to spread the repayments over a longer period of time. These flexible repayment arrangements are important as they will facilitate and help many borrowers meet their loan commitments at the end of a Covid-19 payment break, but lenders should also fully explain the nature of the new repayment and outline the implications, in terms of cost and any other relevant factors.

The Minister for Finance is very conscious that many other borrowers continue to be impacted by the economic consequences of Covid-19 and are not yet in a position to meet their loan commitments. He is fully aware of the stress and uncertainty that these borrowers are still facing, and they will continue to need assistance and support from their lenders and from Government. For its part, the Government, is continuing to provide significant income support to people who cannot get back to work, while grants, credit facilities and other supports are also available to businesses which continue to be affected by the restrictions which are still necessary to control the pandemic. Banks and lenders also need to continue to support and work with their customers and borrowers who are still impacted by Covid-19.

As the House will be aware, the Tánaiste and the Ministers for Public Expenditure and Reform and Finance met the CEOs of the retail banks and Banking & Payments Federation Ireland yesterday, where that point was clearly and strongly made to them. In fairness, it was accepted by the lenders, as Deputy Mattie McGrath has acknowledged. At the meeting, the banks outlined their plans for their customers who will be coming off payment breaks and they indicated that this engagement was a priority for them. They also indicated that they would have approximately 2,500 staff actively working on this matter, they would seek to work with and understand the individual situation of every borrower, and they wished to put in place individual solutions for borrowers if and when required. They stressed that their focus was on engagement, assessment and solutions for those who are still impacted by the pandemic.

The recent change in the European Banking Authority, EBA, guidelines for Covid-19 payment breaks, which the Minister for Finance wishes to emphasise refers only to the closing date for an application for a Covid-19 payment break, does not restrict or hinder lenders from agreeing appropriate further support arrangements for borrowers on a case-by-case basis. Indeed, the EBA has made it clear that such continued Covid-19 supports can include further breaks on loan repayments. However, other options will be available to borrowers at the end of a Covid-19 payment break and may well be better overall for them. The best individual arrangement can only be found where there is a meaningful engagement by both the lender and the borrower. The Government is conscious that this applies to the lender in particular.

It is important that lenders live up to the commitments that they have made to the Government and, more importantly, their customers who are still experiencing genuine difficulty. In that regard, I welcome the statement by the Deputy Governor of the Central Bank, who has said that the Central Bank, which is the statutory regulator of banks and other lenders and has prime responsibility for protecting the consumer of financial services, will intensify its engagement with lenders to ensure they are engaging effectively and meaningfully and providing the appropriate post-payment break to borrowers who need it.

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