Pearse Doherty (Donegal, Sinn Fein)
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2. To ask the Minister for Finance further to the statement in the programme for Government regarding the intention to "work with the Central Bank to amend the code of conduct on mortgage arrears to include an obligation on providers of mortgage credit to provide a range of sustainable arrears solutions, this code of conduct will be put on a statutory basis", what these sustainable arrears solutions will consist of and when he envisages the obligation for sustainable arrears solutions will be put on a statutory footing. [10760/16]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank's code of conduct on mortgage arrears, CCMA, provides a strong consumer protection framework to ensure that each borrower who is experiencing genuine difficulty in meeting the repayments on a mortgage secured on a primary home is treated in a timely, transparent and fair manner by lenders. The CCMA recognises that it is in the interests of borrowers and lenders to address financial difficulties as speedily, effectively and sympathetically as circumstances allow.

The CCMA applies to all regulated mortgage lenders operating in the State when dealing with borrowers facing, or in, arrears on a mortgage which is secured on a primary residence. Furthermore, the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 provides for the regulation of credit servicing firms and, accordingly, the CCMA also applies to such firms which are servicing primary home mortgages held by non-regulated entities. An addendum to the CCMA was published during 2015 to reflect this fact.

The CCMA was issued by the Central Bank pursuant to the provisions of section 117 of the Central Bank Act 1989 and regulated entities are required to comply with the provisions of the code as a matter of law. The CCMA is, therefore, issued under statute and, as stated by the Supreme Court, it forms part of the law.

The Central Bank has the power to administer sanctions for a contravention of this code under Part IIIC of the Central Bank Act 1942.

As recognised by the programme for Government it is important to keep the provisions of the code, and the wider statutory framework for the protection of consumers of financial services, under review to ensure they remain appropriate to the evolving position of the mortgage market. As the Deputy is aware, the code has already been reviewed and updated over time and the Government will continue to liaise and work with the Central Bank to ensure that the code of conduct on mortgage arrears, CCMA, continues to be monitored and further updated as necessary in a way that is fair to the legitimate interests of debtors and creditors and, taking account also of appropriate wider public policy considerations, that sustainable solutions will be available to address genuine mortgage difficulty.

Additional information not given on the floor of the House

In addition it is worth noting that my Department has been working with the key Government Departments and agencies to develop co-ordinated communications on mortgage arrears to make distressed borrowers aware of agencies which can offer help.

Pearse Doherty (Donegal, Sinn Fein)
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We definitely need political reform because the first minute and 50 seconds of the time allowed for this reply was spent by the Minister on not answering the question. Can we get to the details of this in the minute that I have available? David Hall, who has done sterling work on behalf of those in mortgage arrears and who was involved in the programme for Government negotiations, has spoken on national radio about this issue. It seems some positive elements are emerging from his work there. He mentioned on the Sean O'Rourke show the commitment in the programme for Government that the Government would work with the Central Bank to amend the code of conduct on mortgage arrears to include an obligation on providers of mortgage credit to provide a range of sustainable arrears solutions, and that is what appeared in the programme for Government. He went on to say that this means that all customers in arrears will be offered a split mortgage or a mortgage to rent. Can the Minister confirm that David Hall's interpretation of the outcome of those negotiations is that all those in mortgage arrears will be offered those two options which is a split mortgage and a mortgage to rent? If that is the case, it is a step in the right direction. We have been calling for a long time for all options to be offered to those who needed the solutions being offered by the State.

Also, when will the code of conduct on mortgage arrears be put on a statutory footing? The Minister will remember that this was an argument I put to him. It was contained in my Land and Conveyancing Law Reform (Amendment) Bill and the Minister gave me ample reasons as to why it should not happen. Can he advise when it will be on a statutory footing? Will the two solutions I mentioned be part of this and, if so, when is it expected they will be introduced?

Michael Noonan (Limerick City, Fine Gael)
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The code of conduct, as it exists, is on a statutory basis. What we are talking about now is proposed amendments to the code of conduct. My commitment is that any amendment would naturally be covered by statute as well, so there would be a statutory basis to it. The code of conduct has been reviewed already and I am willing to review it again to make it mandatory on lenders to provide the more effective of the range of options that are now in the system to their borrowers. The two the Deputy mentioned are two that are likely to have a strong uptake but again I am prepared to take the Deputy's advice on that. The two he mentioned are not exclusive. If there are others, they may be included. I am commencing discussions with the Central Bank to see what way this will be formatted. I assume that when the new finance committee is put in place I will put any draft that we come up with before the Deputy for his consideration and suggestions at that time.

Pearse Doherty (Donegal, Sinn Fein)
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I welcome the idea that these two proposals would be put on a statutory basis and that lenders would have to offer them. It is David Hall's understanding that those were the two proposals agreed as part of the programme for Government talks. Can the Minister confirm that, at a minimum, these two proposals will be offered to all distressed borrowers? Can he also inform us of the advice he got from the Attorney General on this issue? He made a big play about the unconstitutionality of capping standard variable interest rates and how would that be addressed when property rights would be altered to ensure that lenders had to offer these products? Crucially, the Minister will know that different financial institutions offer different ranges or versions for split mortgages. Has he got a particular split mortgage in mind, one on which, for example, an interest rate would not be charged on the part element of it, so to speak? Are those final details worked out and, crucially, can the Minister outline a pathway as to how this will be introduced and implemented, together with a timeframe, to give borrowers an idea about this as they will be holding off because this is coming down the line? Can he indicate when this will be implemented?

Michael Noonan (Limerick City, Fine Gael)
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I can confirm that in conversations around the time of the negotiation of the programme for Government there was an agreement that we would continue to have the code of conduct on a statutory basis and that it would be extended to cover certain options that borrowers are not statutorily bound to offer. The two the Deputy mentioned certainly were the principal ones that came up in conversation but there may be others as well. There is not a draft: it was an acceptance of an issue in principle and now that we have the programme for Government agreed and published we are commencing to work with the Central Bank to format this. I have had no discussion with the Attorney General about this because, as the Deputy is aware, the Central Bank has very strong powers. It was it that promulgated the code of conduct in the first instance and I do not see a constitutional difficulty arising.

Seán Ó Fearghaíl (Kildare South, Ceann Comhairle)
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Question No. 3 cannot be taken as Deputy Bruton is not in the Chamber, therefore, we will move on to Question No. 4.