Bríd Smith (Dublin South Central, People Before Profit Alliance)
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9. To ask the Minister for Finance the steps he will take to ensure persons are not charged interest on loan or mortgage deferrals by banks and other lending institutions, specifically such institutions in which the State has shares, etc., during the Covid-19 crisis; and if he will make a statement on the matter. [16300/20]

Paul Murphy (Dublin South West, RISE)
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16. To ask the Minister for Finance the actions he will take to stop banks charging interest on Covid-19 mortgage breaks. [16311/20]

John Lahart (Dublin South West, Fianna Fail)
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I have been informed that I can take Deputy Paul Murphy's question and the earlier one. For the Minister's information, these are Questions Nos. 9 and 16. We are taking a step back to the previous question. Questions Nos. 9 and 16 were to be taken together and Question No. 16 is in Deputy Paul Murphy's name.

Paul Murphy (Dublin South West, RISE)
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I thank the Acting Chairman. I want to ask about the banks and the rip-off that is currently going on of the 160.000 people who availed of a mortgage break. The banks, obviously, originally lied and stated that they had to charge interest before it was revealed that they did not have to. They have been choosing to charge interest costing a married couple on average over €6,000. The question is, what will the Minister do about it? How will he stop this rip-off?

Paschal Donohoe (Dublin Central, Fine Gael)
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It is due to my work, and work that was done by the banks, that the payment breaks are in place in the first place. These are 160,000 payment breaks. That means there are tens of thousands of mortgage holders availing of these breaks. I want to ensure that if this issue develops across this year, we are not in a position that any additional profit is being made from this and that these payment breaks and, in particular, the point at which mortgage holders exit from them, are dealt with carefully and fairly.

There are costs that develop from the implementation of these payment breaks. There are costs involved in bringing in payment breaks in the first place and these are costs that must sit somewhere. As they are being dealt with by the banks, it is important that those who are in receipt of them are clear about where they stand and about the kind of expense that might be incurred by them in the future, and that it is open to those exiting these payment breaks to move back onto a mortgage repayment schedule that is the same as the one they left in terms of the average monthly payment.

While there are concerns and debates around these mortgage breaks, the fact that they have been brought in has been a significant help to the many tens of thousands of citizens who need them, and we now need to look at how they can continue to be protected as we deal with the consequences of this disease.

Paul Murphy (Dublin South West, RISE)
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What the Minister is actually saying is he will not do anything about this rip-off. He is saying that what is being done is good enough and people should be happy about it. He is saying that there is nothing he can do about a cost of more than €6,000 a year for a couple in which one or both have lost their jobs and who are facing a crisis situation and he is not even looking to do anything about it. He does not mind that the banks lied to him and lied to the public and that they are able to get away with that. That is simply not acceptable. It will not be acceptable to the people who are faced with paying that €6,000. We have a situation where there is partial State ownership of a number of banks but the Minister is not talking about using that State ownership or doing anything further to deal with this issue.

Paschal Donohoe (Dublin Central, Fine Gael)
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What I have done to support those who are facing the kind of pressures that the Deputy is referring to includes the wage subsidy scheme, the introduction of the PUP, the support that has been made available to companies to keep them in operation to keep them trading across that period. That is the track record of this Government and the work that I have done.

The payment breaks that have been brought in that are of support to tens of thousands of mortgage holders are a result of work that the Government and the Central Bank did in dealing with the banks. I reiterate my expectation, as I said days after this initiative was announced, that this is not an opportunity for profiteering, and that those availing of these mortgage breaks who need this support and who deserve help at a time of such difficulty should be treated fairly and transparently by the banks. I will focus particularly on what happens during the period in which these mortgage payment breaks come to an end.

It is not a case of what I have not done; it is a case of what I have done in supporting families at a time of such difficulty and supporting those who are paying these loans.

Paul Murphy (Dublin South West, RISE)
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The Deputy's party leader, the Tánaiste, says that he does not fully trust the banks not to profiteer from this situation. The Minister is not even saying that. He is asking us to look at the good stuff the Government has done elsewhere rather than at the absolute scandal whereby banks were, correctly, pressurised to offer mortgage breaks but, when people took up those mortgage breaks because of the crisis, continued to load interest upon them. These are people who cannot afford to pay. The banks have scandalously lied to the Government and to the public. They suggested they had no choice but to charge interest. When this was exposed as a falsehood and it was shown that they had a choice, the Government's answer was that, while it cannot fully trust the banks, it is not going to do anything about it. It is an utter scandal and it proves the point that banks should be in public ownership and public control and that they should be run for the interests of society rather than society being run in their interests.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister for Finance owns the majority shareholding in AIB and Permanent TSB on behalf of the Irish people and they, and other banks, pulled the wool over his eyes and over those of the Taoiseach. Last week the Taoiseach denied that the minutes were accurate. He has since clarified that point further. When did the Minister for Finance become aware that the banks did not need to charge interest, as they suggested at the meeting of 11 May? What has he done since? How will he ensure that the banks do not profiteer? Does he believe that Permanent TSB, in charging people an additional €6,300 on a loan of €250,000 over a term of 30 years which has not been extended, is not profiteering? I welcomed the payment breaks when announced but it was my understanding from my engagement with the financial system that the banks would not charge interest at this time. Every single person who availed of these breaks now has more debt and has greater repayments as a result. When did the Minister for Finance become aware of this situation? Does he believe the bankers misled him at the meeting of 11 May? I refer particularly to KBC, which was not charging interest for low-income households in Belgium at that time.

Paschal Donohoe (Dublin Central, Fine Gael)
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I became aware of the clarified guidance from the European Banking Authority, EBA, on this matter shortly after it issued. That is when I became aware of it.

Pearse Doherty (Donegal, Sinn Fein)
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Does the Minister mean last Tuesday?

Paschal Donohoe (Dublin Central, Fine Gael)
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I cannot remember the exact date but I became aware of it when it was published by the European Banking Authority. In dealing with the banks, I have made it very clear that it is critical that this period, when Covid is having such a great effect on the lives and incomes of our citizens, not be used as an opportunity to make additional profit. When we see the financial statements which the banks are to make available in a number of weeks' time - I am basing this on guidance offered by other companies - we will see that they are no longer making the kind of profit they made last year and in recent years.

Pearse Doherty (Donegal, Sinn Fein)
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May I come in again? I do not know what words to use to describe that response. The Minister is telling me that he first became aware of the situation when the EBA issued a clarification last week. Deputy Donohoe is the Minister for Finance. I do not know how many aides or advisers he has. He has a full Department at his disposal. The Central Bank published the letter it sent to me on 22 June on its website. I knew before 22 June, however, because of my engagement with the Central Bank. I wrote to the Central Bank at the start of June. I engaged with it before that. In my letter I pointed out that interest was not being charged in Spain or Belgium, countries which fall under the same EBA guidelines. That is why I wanted written confirmation. The Minister is giving the impression that he sat down with the banks, in some of which we hold the majority shareholding, and allowed them to spin him a yarn. He did not lift the phone to call the Central Bank to check what the situation was. He did not write to the Central Bank, as I did. It is obvious that nobody in his Department is looking at what is published on the Central Bank's website because it is there in black and white that banks do not have to charge interest and that doing so will not, in itself, create a risk of default or credit issue for the consumer.

Paschal Donohoe (Dublin Central, Fine Gael)
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I do not fully understand the allegation Deputy Doherty is making but I have stated again and again in responding to questions this morning-----

Pearse Doherty (Donegal, Sinn Fein)
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I am saying the Minister is not doing his job. I am saying he is asleep at the wheel.

Paschal Donohoe (Dublin Central, Fine Gael)
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My guiding interest in all of this is to protect and support the tens of thousands of families who are under pressure as a result of this pandemic. My track record in all of this is clear. I answered the Deputy's question regarding when I became aware of the engagement between the Central Bank of Ireland and the European Banking Authority earlier on. At that meeting, the banks made clear their understanding of the guidance that had been issued by the European Banking Authority. I knew that our Central Bank was engaging with the EBA on this matter. I wanted that engagement to take place. I became aware of the revised guidance from the European Banking Authority when it issued.

Pearse Doherty (Donegal, Sinn Fein)
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There was no revised guidance. The Minister should clarify the record. There was a clarification. On 22 June the Central Bank wrote to me-----

John Lahart (Dublin South West, Fianna Fail)
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This was not actually the Deputy's question.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister is completely asleep at the wheel. He has not protected the homeowners, who now have additional debt because the banks have charged interest. He has backed the banks on that.

John Lahart (Dublin South West, Fianna Fail)
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The final question is in the name of Deputy Paul Murphy.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Tell that to families paying mortgages.

John Lahart (Dublin South West, Fianna Fail)
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Hold on. This was not even Deputy Doherty's question. I am calling Deputy Paul Murphy.