Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

147. To ask the Minister for Finance his plans to deal with spiralling mortgage arrears held by non-bank financial institutions; if he will make these institutions subject to targets for restructuring solutions; and if he will make a statement on the matter. [1884/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am informed by the Central Bank of Ireland ('the Central Bank') that non-bank financial institutions are not a regulatory category. 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.  A register of all Retail Credit Firms is available on the Central Bank website at the following link: . The Deputy will be aware that all consumer and relevant SME loans sold by regulated financial institutions are now covered by the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015. Therefore borrowers are now restored to the protections they previously had, such as the Code of Conduct on Mortgage Arrears (CCMA), the Consumer Protection Code and the Code of Conduct for Business Lending to Small and Medium Enterprises. Borrowers who previously had access to the Financial Services Ombudsman also have this right restored by this legislation.

The Mortgage Arrears Resolution Targets (MART) were introduced by the Central Bank in March 2013, as a prudential policy measure, to set progressively more demanding quantitative targets for specified Credit Institutions to process mortgage arrears cases and achieve sustainable outcomes.  Retail credit firms, which are not authorised to accept deposits, are not subject to the prudential standards set out in the MART.  However, the same consumer protection framework applies to retail credit firms as to other regulated lenders, including the Consumer Protection Code and the Code of Conduct on Mortgage Arrears (CCMA).  Any decision about extending the application of MART targets would be a matter for the Central Bank, but as the Deputy is already aware, the Central Bank  announced last April that following a thorough assessment of it's supervisory approach to mortgage arrears, it has determined that relying on common quarterly solution targets across all banks is no longer appropriate. 

The Deputy will also be aware that the CCMA 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.  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 monitors Retail Credit Firms' treatment of borrowers under the CCMA and engages with them in relation to the Mortgage Arrears Resolution Process (MARP), as provided for in the CCMA.

You will be aware that on 23 June 2015 the Central Bank published the results of a themed inspection of lenders' compliance with its statutory CCMA, which found that, overall, lenders have implemented frameworks as required by the CCMA.  These results are available at .  I am informed by the Central Bank that Retail Credit firms were included in the scope of this themed inspection of the CCMA.  The Central Bank has confirmed that it is currently reviewing responses received from all lenders that were subject to the CCMA themed inspection. It continues to engage with these lenders as part of it's on-going supervisory engagement to ensure compliance with the Code of Conduct on Mortgage Arrears (CCMA).