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

148. To ask the Minister for Finance to instruct banks to make greater use of split mortgages and other long-term solutions in preference to arrears capitalisation; and if he will make a statement on the matter. [1885/16]

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

The Deputy will be aware that the Central Bank of Ireland (Central Bank) publishes the Residential Mortgage Arrears and Repossession Statistics series on a quarterly basis which provides a comprehensive overview of the entire Irish mortgage market including information on arrears broken down by inter alia restructure arrangements broken down by type; and the performance of restructured mortgage accounts. Data is provided by all entities that hold loans secured on properties located in the Republic of Ireland including inter alia bank and non-bank entities. The most recent series (Q3 2015 data) was published by the Central Bank on 11 December 2015 and can be accessed at . A total stock of 120,806 PDH mortgage accounts were categorised as restructured at end Q3 2015, reflecting an increase of 1.9% when compared with the previous quarter. Split mortgages and arrears capitalisations accounted for 20% and 28% of the total PDH restructures respectively, and showed significant increases over the quarter.

The Deputy will also be aware that I have no direct function in the relationship between the customer and banks. Notwithstanding the fact that the State is a shareholder in certain financial institutions, I must ensure that these banks are run on a commercial and independent basis to ensure the value of the banks as an asset to the State.

Decisions taken by the banks are a matter for the board and management of the relevant institution. The relationship framework agreements define the arm's-length nature of the relationship between the State and the banks in which the State has an investment. All banks operating in the State are therefore entitled to pursue all options open to them within the significant constraints imposed by the regulator, the Central Bank and the law as it applies.  In this context, I would remind the Deputy of the strong consumer protection framework provided by the CCMA, in particular provision 39 - Resolution, which requires each lender to explore all of the options for alternative repayment arrangements (ARAs) which it offers, when determining which ARA options are viable for each particular case.