Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

Research has indicated that there is potential for existing mortgage holders to make mortgage savings by switching their mortgage. This is a particularly important consideration at a time of rising interest rates. In this regard, I have met the CEOs of the retail banks and a number of non-bank lenders and emphasised that they should take a consumer focused approach to encourage switching where possible. On behalf of my Department, the Economic and Social Research Institute, ESRI, is carrying out work which will inform the development of tools to promote switching. However, the work of the ESRI also serves to highlight consumer inertia as a critical issue in some cases, which deserves further attention. The Competition and Consumer Protection Commission, CCPC, and Money Advice & Budgeting Service, MABS, also play an important role in informing consumers about the options available to them.

It is a priority for me to ensure that the regulatory framework supports borrowers in the mortgage switching process. In the context of the review of the consumer protection code, I have indicated that the Central Bank should review the existing regulatory provisions and consider whether more dedicated mortgage switching resources, such as a stand-alone mortgage switching code, could better encourage and facilitate switching in the mortgage market. In that context, and in the context of the rise in the cost of living more generally, the Central Bank wrote to all regulated firms last November to set out its expectations on how regulated firms should support their customers. With respect to mortgages, the Central Bank is especially focused on ensuring firms have the resources and arrangements in place to assess applications from existing and new, or switching borrowers, in a manner that is timely and based on prudent lending standards applied consistently across all applicants.

The Central Bank is also scrutinising the switching and lending activity of the retail banks to ensure there is no discrimination based on who a borrower's current creditor is and it has confirmed that the work identified no evidence to date of such discrimination. I also note that the Banking and Payments Federation of Ireland, BPFI, and MABS recently announced the expansion of their 2017 BPFI-MABS framework agreement for late-stage mortgage arrears. Going forward, the agreement will include all customers, from pre-arrears to late-stage arrears.

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