Michael McGrath (Cork South Central, Fianna Fail)
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110. To ask the Minister for Finance the number of residential mortgages that are classified as sub-prime; the number of sub-prime lenders, currently operating in the market; the total value of sub-prime mortgages outstanding; the rate of arrears on these mortgages; the actions specific to the sub-prime sector, which are being taken to address arrears; and if he will make a statement on the matter. [10984/15]

Michael Noonan (Limerick City, Fine Gael)
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It is important to note that there is no such regulated category as "sub-prime lender".  However, Retail Credit Firms are authorised to provide credit, in the form of cash loans, directly to individuals (these firms are not licensed to accept deposits).  Some firms authorised in this category are mortgage lenders.  Retail Credit Firms have been subject to regulation by the Central Bank since 1 February 2008.  A register of all Retail Credit Firms is available on the Central Bank website at the following link:

In light of their activities, Retail Credit Firms are not subject to the same prudential supervisory regime as licensed credit institutions; however, the same consumer protection framework applies to Retail Credit Firms as to all other regulated lenders, i.e. Irish licensed banks or banks providing services into Ireland on a cross border/branch basis, including the Central Bank's statutory Consumer Protection Code and the Code of Conduct on Mortgage Arrears ('CCMA'). 

The sets out requirements for all mortgage lenders, including Retail Credit Firms, dealing with borrowers in arrears or pre-arrears on a mortgage loan which is secured by their  primary residence (as defined).  It provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender and that long term resolution is sought by lenders with each of their borrowers.

The Central Bank engages with Retail Credit Firms in relation to their treatment of borrowers under the Mortgage Arrears Resolution Process (MARP), as provided for in the CCMA. The MARP sets out the steps which lenders must follow:

Step 1: Communicate with borrower;

Step 2: Gather financial information;

Step 3: Assess the borrowers circumstances; and

Step 4: Propose a resolution.

The Central Bank conducted a review of lenders' implementation of the CCMA in 2013.  This review covered all lenders, including Retail Credit Firms.

In 2014 the Central Bank commenced a themed inspection of compliance with the CCMA and this is currently on going. The Central Bank plans to publish the results in the first half of 2015.  The themed inspection includes onsite inspections of a number of regulated mortgage lenders to examine the processes in place around certain provisions of the CCMA and the controls lenders have in place to ensure compliance with those processes and the CCMA.  The Central Bank expects to see that mortgage lenders have taken the letter and spirit of the CCMA seriously and it will seek to ensure that they can demonstrate compliance with its provisions. Where the Central Bank finds evidence of instances of non-compliance, it will continue to hold regulated lenders to account for any deficiencies in their policies and practices in this regard.

Data published by the Central Banks shows that non-bank lenders accounted for 5.6 per cent of the total stock of residential mortgage accounts outstanding at end-December 2014 (6.3 per cent in value terms). A total of 19,937 mortgage accounts issued by these lenders were in arrears of more than 90 days at end-Decemberthis figure accounted for 18.5 per cent of total mortgages in arrears over 90 days. The outstanding balance on these accounts was €4.6 billion, equivalent to 54.5 per cent of the total outstanding balance on all mortgage accounts issued by non-bank lenders

Michael McGrath (Cork South Central, Fianna Fail)
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111. 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. [10985/15]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Central Bank that it does not publish statistics in relation to the number complaints against banks for non-compliance with the CCMA.

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, supervisory action is taken. 

To date the Central Bank has not imposed a sanction on a mortgage lender in relation to breaches of the CCMA.  However, it is important to note that supervisory intervention is not limited to the use of administrative sanctions.

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:

In 2014 the Central Bank commenced a themed inspection of compliance with the CCMA and this is currently on going. The Central Bank plans to publish the results in the first half of this year. 

The themed inspection includes onsite inspections of a number of regulated mortgage lenders to examine the processes in place around certain provisions of the CCMA and the controls lenders have in place to ensure compliance with those processes and the CCMA.  The Central Bank expects to see that mortgage lenders have taken the letter and spirit of the CCMA seriously and it will seek to ensure that they can demonstrate compliance with its provisions. Where the Central Bank finds evidence of instances of non-compliance, it will continue to hold regulated lenders to account for any deficiencies in their policies and practices in this regard.