Joe Higgins (Dublin West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

6. To ask the Minister for Finance his view on the future treatment of mortgage customers following the announcement by Ulster Bank to move its arrears support unit to Scotland, with the loss of 110 jobs here; and if he will report on any recent meetings with Royal Bank of Scotland, RBS, or Ulster Bank executives. [8274/14]

Joe Higgins (Dublin West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

I want to ask the Minister what may be the future prospects for ordinary mortgage holders with Ulster Bank in the light of the fact that the bank is moving its arrears support unit to Scotland and sacking 110 workers here. Has he had any meeting with representatives of Royal Bank of Scotland or Ulster Bank about these or other issues in recent times?

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Ulster Bank Ireland Limited is a regulated entity, licensed pursuant to section 9 of the Central Bank Act 1971. It is also subject to the Central Bank's mortgage arrears resolution targets, MART, process. Ulster Bank's performance in respect of these targets is closely monitored and the Central Bank's MART audits examine the bank's processes of determining and proposing sustainable solutions against its sustainability guidelines. The consumer protection framework also applies to Ulster Bank Ireland Limited and includes the consumer protection code and the code of conduct on mortgage arrears, CCMA. These are statutory codes with which Ulster Bank Ireland Limited must comply. The recent announcement by Ulster Bank does not alter these requirements.

In terms of mortgage arrears, the CCMA sets out requirements for all mortgage lenders dealing with borrowers facing or in mortgage arrears and provides a strong consumer protection framework to ensure borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lenders and that long-term resolutions are sought by lenders with each of their borrowers. The CCMA also sets out the framework that lenders must use when dealing with borrowers in mortgage arrears or pre-arrears. This framework is known as the mortgage arrears resolution process, MARP, and it sets out the four steps lenders must follow in dealing with borrowers in difficulty, namely: the lender must communicate with the borrower; the lender must gather financial information; the borrower's circumstances must be assessed; and a resolution is proposed.

As part of the normal business of my Department, my officials meet regularly representatives of Ulster Bank. They and I met RBS executives, including the current CEO, last week. The Deputy may be aware that, following the review by the UK Treasury in the autumn of 2013, RBS reaffirmed its commitment to the Irish market.  It is reviewing the operations of Ulster Bank in Ireland with a view to creating a sustainable business model.  It is expected that the findings of the review will be published by the end of February 2014.

Joe Higgins (Dublin West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

There is concern among those who have mortgages with Ulster Bank and also among the staff of the institution about the sacking of 110 workers here and the fact that the arrears support unit is to be moved to Edinburgh. Ulster Bank was up to its neck when it came to fuelling the profit-fest that was the Irish property bubble. For example, in 2004 a decision was taken to abolish the bank's risk policies and controls committee. At the time it was stated the committee represented unnecessary bureaucracy. There are concerns that the move to Scotland will lead to the arrears support unit being more remote and less sympathetic to mortgage holders here who are experiencing difficulties. Some staff are of the view that the company will feel less constrained in adhering to codes of conduct as a result. The new staff who will be taken on in faraway Edinburgh will be on lower pay and have less favourable conditions. Is the Minister of the view that these individuals will deal in a proper and sympathetic manner with mortgage holders in Ireland who are in distress?

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In any restructuring of Ulster Bank's mortgage arrears unit, it must continue to comply with the code of conduct on mortgage arrears, CCMA, which sets out requirements for all mortgage lenders dealing with borrowers who are in mortgage arrears and provides a strong consumer protection framework to ensure that borrowers struggling to keep up with their mortgage repayments must be dealt with in a fair and transparent manner by their lenders. This will not change in any way regardless of whether the unit is in Dublin, Belfast or Edinburgh.

Joe Higgins (Dublin West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

Then why is it moving to Edinburgh?

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The same rules apply. We have held meetings with Ulster Bank, which has confirmed this. I have also twice met - once before Christmas and once after - Mr. Mark Carney, the Governor of the Bank of England, who assured me that the policy that is published in respect of Ulster Bank is the one that will continue to be implemented.

Joe Higgins (Dublin West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

As the Minister knows, the Royal Bank of Scotland, RBS, of which Ulster Bank is a part, has a global restructuring group. The likelihood is that the mortgage loans of ordinary householders will be put onto the international marketplace, in the same way as happened in respect of the former Irish Nationwide mortgage holders, to be snapped up by vulture capitalists. Does the Minister not see that the same problems and fears that we discussed earlier in respect of the mortgage holders now in the grasp of IBRC can be repeated in this instance? When the chief executive officer of Ulster Bank was before the finance committee, I found him distinctly unsympathetic towards mortgage holders in arrears in some of his comments. Were the chief executives of Ulster Bank and RBS among those the Minister met? Did they give him any indication of what the future holds for the ordinary mortgage holders currently with them?

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I met the chief executive of RBS. He was accompanied by the chief executive of Ulster Bank. We discussed the future of Ulster Bank. What they stated was consistent with the information I had received from the Governor of the Bank of England. Ulster Bank will continue to trade North and South and try to be a high street bank providing the kinds of service that are needed, but we should remember-----

Joe Higgins (Dublin West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

Why is its arrears support unit moving to Edinburgh? Is that not sinister?

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy knows that banks all over the world have lost a great deal of money. RBS suffered very severe losses, as did its subsidiary in Ireland, Ulster Bank. They are all restructuring and trying to be more efficient and to cut costs. As part of the restructuring, Ulster Bank moved the unit to Edinburgh. From a legal or practical point of view, though, this will not affect mortgage holders in Ireland, as Ulster Bank is still bound by the same rules as the banks that have their mortgage units in Ireland. Of course we regret the loss of jobs at the unit. No job loss is welcome. We would prefer it had the unit stayed in Ireland and maintained its 110 jobs or so.