Arthur Morgan (Louth, Sinn Fein)
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Question 70: To ask the Minister for Finance if he will proceed with abolishing long service increments to TDs; when he will proceed with same; if legislation is necessary; and if he will make a statement on the matter. [19099/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Among the measures announced in my Budget Statement to this House on the 7th April was the decision of the Government to make additional changes to the remuneration of members of the Oireachtas.

One of the changes to be made was in relation to the payment of long service increments to members. Following advice received from the Attorney General regarding the legislative changes required to effect the changes announced, I can confirm that legislation is required to cease the payment of Long Service Increments to members of the Oireachtas.

In line with the legal advice received, the Government has decided that no further long service increments will be awarded to Members of the Oireachtas but existing members who are currently in receipt of Long Service Increments will retain them for the duration of the current Dáil – or Seanad as appropriate - only. Long Service Increments will not be paid to any members of the Oireachtas in the next Dáil and Seanad. I have recently written to those Deputies who are immediately affected advising them of these measures.

The legislation necessary to effect these changes will be published in the current Dáil session.

Joan Burton (Dublin West, Labour)
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Question 71: To ask the Minister for Finance if he will introduce legislation to establish an extra judicial debt settlement mechanism for persons who have problems meeting loan repayment commitments and whose creditors are seeking an agreed repayment schedule without recourse to the courts; the reason the delay in their publication in 2009; and if he will make a statement on the matter. [18949/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Deputy may wish to note that number of important initiatives are in place to assist consumers who have fallen into debt or are in danger of falling into debt.

For example my colleague, the Minister for Social and Family Affairs provides a non-profit public service counselling service through the Money Advice and Budgeting Service (MABS) at his Department. This is a national, free, confidential and independent service for people in debt or in danger of getting into debt. In 2009, almost €18 million has been provided to assist MABS with its workload. I understand that MABS are working together with the Irish Bankers Federation (IBF) to agree a joint protocol to enable MABS and the IBF continue to work together effectively when dealing with debt problems of personal debtors who approach the MABS Service for assistance.

The Financial Regulator's Consumer Protection Code (CPC), was a major step in promoting the interests of consumers. It obliges the regulated entities that it covers to act in the customer's best interests, to seek appropriate information about the customer, to ensure that the products and services provided are suitable for the consumer, to treat their customers fairly and have adequate procedures in place to handle complaints. The CPC also sets out requirements that a regulated entity must contact the consumer as soon as it becomes aware that a mortgage account is in arrears and that it must have in place a procedure for handling accounts in arrears. It is best practice for lenders to agree a remedial action plan with a borrower where it detects arrears starting to emerge and to try and assist the borrower to manage his or her financial commitments and not allow the situation to worsen. These obligations are additional to the statutory prior information and warnings required under the Consumer Credit Act 1995.

In addition, the Recapitalisation Programme announced on 11 February 2009 includes a new Code of Conduct for Mortgage Arrears, which has been issued by the Financial Regulator and came into force on the 27 February 2009. The new Code applies to mortgage lending activities to consumers in respect of their principal private residence in the State and is mandatory for all mortgage lenders registered with the Financial Regulator including so-called "sub-prime lenders". Under the mortgage arrears code where a borrower is in difficulty the lender shall make every reasonable effort to agree an alternative repayment schedule. Under the Code consideration should be given on a case-by-case basis to alternatives such as deferral of payments, extending the term of the mortgage, changing type of mortgage, or capitalising arrears and interest. In any case, lenders will not commence legal action for repossession until after six months from the time arrears first arise.

In addition as part of their recapitalisation scheme, A.I.B. and Bank of Ireland, will not commence court proceedings for repossession of a principal private residence until after 12 months of arrears appearing where the customer continues to co-operate with the banks.

The Financial Regulator has prioritised the provision of information for consumers about the potential risk of excessive debt and has also drawn attention to the need for consumers to choose the right type of loan for their needs. It has also developed a number of specific initiatives to help consumers make informed choices in terms of the financial products they choose, the amount of risk they take on and the cost of financial products.

I believe that the above initiatives provide substantial safeguards and assistance to consumers who experience difficulty in meeting their loan commitments.