Niall Collins (Limerick County, Fianna Fail) | Oireachtas source

I thank the Deputy for raising this important matter.

The Government is acutely aware of the pressure that the rising interest rate environment may have on borrowers. In light of this, the Minister convened a meeting with lenders active in the mortgage market on 31 August. The Central Bank of Ireland, the Insolvency Service of Ireland, the Citizens Information Board and the Money Advice and Budgeting Service, MABS, also attended. Following this meeting, on 6 September, the Banking and Payments Federation of Ireland, BPFI, launched the second phase of its dealing with debt campaign to highlight new and existing supports available for mortgage customers.

One of the new initiatives to which I and the Minister draw the Deputy's attention is the work between credit servicing firms and MABS on a streamlined customer engagement framework to accelerate the agreement of sustainable repayment plans for customers in financial difficulty. The consumer protection framework provides the same protections for borrowers regardless of the regulated entity with whom they are dealing, be that a bank, retail credit firm, RCF, or credit servicing firm, CSF. All these regulated entities must be authorised and supervised by the Central Bank and are subject to the full suite of relevant regulatory requirements and financial services legislation, including the code of conduct on mortgage arrears, CCMA. A broad range of measures are in place to protect mortgage holders who are experiencing difficulty with their repayments. The CCMA outlines how a lender must act if a borrower is in or facing mortgage arrears. The code sets out the process entities must follow when borrowers are experiencing difficulties with their mortgage payments. Due regard must be given to the fact that each case is unique and needs to be considered on its own merits.

Regulated entities must explore all the options for alternative repayment arrangements to determine which arrangement, if any, is appropriate and sustainable for a distressed borrower’s individual circumstances. The range of sustainable solutions being offered to customers has expanded significantly, including the use of new alternative payment arrangements, mortgage-to-rent and personal insolvency arrangements. The CCMA provides for an appeals mechanism, including where the entity declines to offer an alternative payment arrangement, where the borrower is not willing to enter into the alternative payment arrangement offered or where the entity classifies the borrower as not co-operating. Appeals can ultimately be referred to the Financial Services and Pensions Ombudsman. The code of conduct on mortgage arrears must be complied with under the law and the Central Bank has the power to take enforcement action against any regulated entity that does not act in compliance with the code.

The Central Bank continues to supervise compliance with the code and will investigate any issues that arise, including patterns of behaviour that suggest the code process is not being followed. Under the code of conduct on mortgage arrears, the lender must contact the consumer about their mortgage arrears in a timely, clear and consumer-friendly manner; get information from the consumer about their financial situation; assess whether a suitable alternative repayment arrangement can be made; and resolve the case by offering an alternative repayment arrangement or not. The code of conduct on mortgage arrears has been designed to protect consumers and regulated lenders are legally obliged to comply with it. The code requires lenders to provide dedicated and specially trained staff in their arrears support unit to manage cases. This includes having any meetings with customers in private and referring them to their online or hard-copy information. Lenders must also follow the mortgage arrears resolution process that sets out how lenders must communicate with consumers and assess their situation with the aim of coming to a resolution. It includes having an appeals process in place in order that consumers can appeal certain decisions of their lender.

This is a robust framework that binds all regulated lenders. If the Deputy has evidence that firms are pursuing borrowers contrary to the provisions of the code of conduct on mortgage arrears, the Central Bank of Ireland will consider any such information as part of its supervisory duties.

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