Michael McGrath (Cork South Central, Fianna Fail)
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227. To ask the Minister for Finance the number of complaints that have been made against banks for non compliance with the Code of Conduct on Mortgage Arrears since it was instituted; the number that have been upheld; the sanctions that have been imposed on banks for cases of non compliance; the maximum sanction that may be handed down; and if he will make a statement on the matter. [43319/14]

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 that it does not publish statistics in relation to the number of complaints against banks for non-compliance with the CCMA. However, it is planning to test compliance with the CCMA later this year. Part III C of the Central Bank Act 1942 provides the Central Bank with the power to administer sanctions in respect of the commission of prescribed contravention(s) by regulated financial service providers and the participation in the prescribed contravention(s) by persons concerned in their management. The Central Bank has informed me that where a concern arises that a prescribed contravention has been or is being committed, the Central Bank may investigate.  Following an investigation an inquiry may be held where there are reasonable grounds to suspect that a prescribed contravention has been or is being committed.  The inquiry shall decide if the prescribed contravention has occurred and determine the appropriate sanctions. 

A prescribed contravention could be a breach of:

- a provision in legislation

- a code, or a direction, given pursuant to legislation

- a condition or requirement imposed on a regulated financial service provider

- any obligation imposed on a regulated financial service provider by the Central Bank

Following an inquiry, the Central Bank, for example, can impose one or more of the sanctions below:

- caution or reprimand;

- direction to refund or withhold all or part of money charged or paid, or to be charged or paid, for the provision of financial service by a financial service provider;

- a direction to pay the Central Bank a monetary penalty (not exceeding the greater of €10,000,000 or 10% of turnover where the financial service provider is a body corporate or an unincorporated body and not exceeding €1,000,000 where the financial service provider is a natural person and for persons concerned in the management of a financial service provider);

- disqualification of a person from being concerned in the management of a regulated financial service provider;

- revocation or suspension of an authorisation;

- direction to the regulated financial service provider to cease committing the contravention;

- direction to pay the Central Bank all or part of its costs incurred by the Central Bank in the investigation of the matter and the holding an inquiry. 

The Central Bank has advised that to date, it has not imposed a sanction on a mortgage lender in relation to breaches of the CCMA.  More information on the Administrative Sanctions procedure can be found at the following link: ). 

The Deputy will be aware that the Central Bank monitors compliance with the statutory consumer protection requirements through its on-going engagement with firms, reviews and research, themed inspections, mystery shopping, and advertising monitoring.  The Central Bank regularly conducts themed inspections to ensure compliance with all of its codes of conducts, including the CCMA. Themed inspections examine issues across a sector. Where a specific compliance issue arises with an individual firm, this is addressed directly with the firm and where appropriate, regulatory action may be taken.  Breaches of regulatory requirements are dealt with in accordance with the Administrative Sanctions procedure. To promote compliance, the Central Bank provides feedback on themed inspections and publish the main issues on its website.  The Central Bank has conducted a number of themed inspections on the CCMA since its introduction in 2009.  Details of these themes and the feedback issued can be found at the following link: .

The Central Bank's plan for themed inspections in 2014 ) includes an inspection of mortgage lenders to test compliance with the revised CCMA.  Compliance with the CCMA is also a Central Bank enforcement priority for 2014.

Where a borrower believes that their lender has not complied with or in any way disregarded the CCMA, he/she may make a complaint to their lender. The lender must seek to resolve the borrower's complaint in line with the complaints handling process set out in provisions 10.7 to 10.12 of the Central Bank's Consumer Protection Code.  Each lender must also establish an Appeals Board to consider and determine any such appeals submitted by borrowers.  If the borrower remains dissatisfied following the outcome from the complaints or appeals process, he/she may then refer the matter to the Financial Services Ombudsman (FSO) who deals independently with unresolved complaints from consumers about their individual dealings with all regulated financial service providers. 

I have been informed by the Office of the Financial Services Ombudsman (FSO) that in relation to Mortgage Arrears Resolution Process (MARP) complaints, where issues of sustainability/repayment capacity are in dispute, the FSO is only in a position to investigate a complaint as to whether the provider, in handling a mortgage arrears issue, correctly adhered to its obligations pursuant to the CCMA.

Details of the number of findings where the issue of CCMA/MARP was raised and the findings issued are detailed below: