Brian Stanley (Laois-Offaly, Sinn Fein)
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Question 142: To ask the Minister for Finance the interest rates banks under State control are charging on their variable mortgages; if his attention has been drawn to the fact that banks under State control are charging punitive rates on these mortgages; the actions he will take on reducing the interest rates being charged by banks under State control; the actions he will take for mortgage holders who are struggling under the weight of high interest rates; and if he will make a statement on the matter. [9423/11]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will appreciate that the mortgage interest rates, financial institutions operating in Ireland, charge to customers are a commercial decision for the institutions concerned. While my Department monitors the impact of changes in mortgage interest rates on the Consumer Price Index, it has no direct function in relation to the individual institution's decisions on the matter. A number of measures are in place to assist mortgage holders who are in genuine difficulties with regard to the payment of their mortgages The Deputy will be aware of the work of the Expert Group on Mortgage Arrears and Personal Debt. This Group produced two Reports, an Interim Report published in July 2010 and a Final Report published in November 2010. All of the Expert Group's recommendations are listed in Chapter 2 of the Final Report. They can be accessed at www.finance.gov.ie.

Since the publication of the Reports, the Code of Conduct for Mortgage Arrears (CCMA) has been revised by the Central Bank 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 MARP are not charged penalty interest charges,

· Harassment of borrowers through unsolicited communications is outlawed,

· Borrowers in financial difficulties, but not in arrears, are allowed to come under the MARP, · When a lender is determining the 12 month period it must wait before applying to the courts to commence legal action, it must exclude any time period during which a borrower is complying with the terms of an alternative repayment arrangement, making an appeal to the internal appeals Board or making a complaint to the Financial Services Ombudsman under the CCMA. 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. Lenders representing the majority of the market have already indicated their willingness to implement the Expert Group's proposals for a Deferred Interest Scheme or a variation of it.

The Deputy will also be aware of the existing importance of the Mortgage Interest Supplement Scheme and the Money Advice and Budgeting Service in assisting consumers who have fallen into arrears or who are experiencing difficulties servicing their mortgage repayments.