Andrew Doyle (Wicklow, Fine Gael)
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258. To ask the Minister for Finance the procedure in place where an official of a financial institution does not offer the code of conduct for mortgage arrears from the Central Bank of Ireland to a client of a bank who is in mortgage distress; the details of the reprimand and if it is required; and if he will make a statement on the matter. [34728/13]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank's Code of Conduct on Mortgage Arrears (CCMA) is a statutory Code issued under Section 117 of the Central Bank Act 1989 and lenders are required to comply with the CCMA as a matter of law. The Central Bank has advised me that it has the power to administer sanctions for a contravention of the CCMA under part IIIC of the Central Bank Act 1942.

The CCMA applies to the mortgage lending activities of all regulated entities, except credit unions, operating in the State, including:

- A financial services provider authorised, registered or licensed by the Central Bank of Ireland; and

- A financial services provider authorised, registered or licensed in another EU or EEA Member State and which has provided, or is providing, mortgage lending activities in the State.

The CCMA applies to the mortgage loan of a borrower which is secured by his/her primary residence.

Under the CCMA, lenders must apply the protections of the Code to borrowers in the following circumstances:

i. Borrowers in arrears and in pre-arrears

ii. In the case of joint borrowers who notify the lender in writing that they have separated or divorced, the lender should treat each borrower as a single borrower under the CCMA (except to the extent that an action requires, as a matter of law, the agreement of both borrowers)

Chapter 3 of the CCMA deals with the appeals process and provides that a lender must have an appeals process to enable a borrower to appeal in relation to a decision of the lender, including:

(a) where an alternative repayment arrangement is offered by a lender and the borrower is not willing to enter into the alternative repayment arrangement;

(b) Where a lender declines to offer an alternative repayment arrangement to a borrower; and

(c) Where a lender classifies a borrower as not co-operating,

and for this purpose must establish an Appeals Board to consider and determine any such appeals submitted by borrowers.

Section 50 of the CCMA states that the Appeals Board must be comprised of three of the lender's senior personnel, who have not been involved in the borrower's case previously. At least one member of the Appeals Board must be independent of the lender's management team and must not be involved in lending matters. In addition, the lender must apply Provisions 10.7 and 10.12 of the Central Bank's Consumer Protection Code 2012 to deal with complaints submitted by borrowers in relation to the lender's treatment of the borrower's case under the CCMA, or the lender's compliance with the requirements of the CCMA.