Joanna Tuffy (Dublin Mid West, Labour)
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Question 106: To ask the Minister for Finance the steps he will take regarding controlled banks and institutions increasing mortgage interest rates thereby increasing pressure on customers who are already struggling with mortgage repayments; and if he will make a statement on the matter. [23542/11]

Michael Noonan (Limerick City, Fine Gael)
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As Minister for Finance, I have no statutory role in the setting of interest rates charged or paid by financial institutions regulated by the Central Bank. The Central Bank has responsibility for the regulation and supervision of financial institutions in terms of consumer protection and prudential requirements and for ensuring ongoing compliance with applicable statutory obligations. Each institution determines the rate it charges its customers, depending on a number of factors, such as cost of funds and commercial considerations, competition in the market, risk pricing and the impact on deposit rates.

In the case of a customer experiencing financial difficulties in meeting his/her mortgage commitments or one who is concerned that he/she is in danger of getting into financial difficulties, mortgage lenders must comply with the requirements of the Central Bank's revised Code of Conduct on Mortgage Arrears (CCMA) which came into effect on 1 January 2011. The CCMA applies to the mortgage loan of a borrower which is secured by his or her primary residence. Primary Residence means a property which is:

the residential property which the borrower occupies as his/her primary residence in this State, or

a residential property in this State which is the only residential property owned by the borrower.

Under the CCMA a lender must have a Mortgage Arrears Resolution Process in place incorporating communication with borrowers, financial information, assessment, resolution and appeals. In exploring all options for alternative repayment arrangements lenders must consider, inter alia, deferred payment, term extension, interest and partial capital payments and interest only arrangements.