Michael McGrath (Cork South Central, Fianna Fail)
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Question 26: To ask the Minister for Finance his plans to implement the recommendations by the mortgage expert group on mortgage arrears in full. [7089/11]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will be aware that the Mortgage Arrears and Personal Debt Expert Group (Expert Group) produced two Reports, an Interim Report published in July 2010 and their Final Report published in November 2010. The Expert Group, which was chaired by Mr. Hugh Cooney, included Mr. Matthew Elderfield, Head of Financial Regulation at the Central Bank, as well as other external experts and senior officials from Government Departments. All of the Expert Group's recommendations are listed in Chapter 2 of the Final Report and have been noted by Government. They can be accessed at www.finance.gov.ie . Since the publication of the Reports, the Central Bank has revised the Code of Conduct for Mortgage Arrears (CCMA) to reflect many of the recommendations of the Expert Group including key recommendations relating to the introduction by all regulated lenders of a standardised Mortgage Arrears Resolution Process (MARP). The most significant changes in the revised CCMA include:

· Borrowers in arrears who co-operate with the Mortgage Arrears Resolution Process (MARP) will not be charged penalty interest charges;

· Harassment of borrowers through unsolicited communications will be outlawed;

· Borrowers in financial difficulties, but not in arrears, will be allowed to come under the MARP; and

· Clarifying the existing 12 month moratorium on legal action in arrears cases.

The revised CCMA was published on 6 December 2010 and came into effect on 1 January 2011. The revised CCMA can be accessed at www.centralbank.ie . Lenders are required to comply with the CCMA as a matter of law but have been given a period of six months grace ending on 30 June 2011 to put in place the requisite systems and training of staff necessary to support the implementation of the MARP. In addition the Central Bank has also written to lenders to issue directions under Section 149 of the Consumer Credit Act 1995 which will mean that lenders cannot impose arrears charges or penalty interest on borrowers who are co-operating with the MARP.

The Expert Group's recommendations are intended to be of benefit to both lender and borrower and it is assumed that lenders will cooperate and implement the recommendations or variations of them as soon as possible. Failure to comply with the revised CCMA may result in sanctions under the Central Bank's Administrative Sanctions Framework.

The Deputy may wish to note that in addition to those recommendations being implemented through amendments to the CCMA, other recommendations will require legislative support involving my Department, the Departments of Social Protection (DSP), Environment, Heritage and Local Government (DEHLG), Justice and Equality (DJE).

In the case of my own Department, a recommendation concerning the scope and the admissibility in Court of the CCMA will need further examination and may require advice from the Attorney General.

In order to implement those recommendations in relation to the mortgage interest supplement scheme (MIS) changes to both primary and secondary legislation will be required. I am informed that the Department of Social Protection is currently finalising an implementation plan that will set out a framework for the future of the mortgage interest supplement scheme.

The recommendation of the Group to amend the local authority needs assessment process has been implemented by the DEHLG. I am informed that local authorities have been provided with clear guidance on the treatment of applicants for social housing support whose mortgages have been deemed unsustainable. It is my understanding that the Minister for Justice and Equality intends to give early attention to the Final Report on Personal Debt Management and Debt Enforcement of the Law Reform Commission which was published in December 2010. That Report contains recommendations on comprehensive reform of the system of personal insolvency law in Ireland.