Michael McGrath (Cork South Central, Fianna Fail)
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96. To ask the Minister for Finance if he is satisfied with the manner in which banks operate the standard financial statement for customers in financial distress; if there is a commonly applied definition of necessary living costs; and if he will make a statement on the matter. [16505/16]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank's Code of Conduct on Mortgage Arrears (CCMA) applies to all regulated mortgage lenders and credit servicing firms operating in the State when dealing with borrowers facing or in mortgage arrears on their primary residence, including any mortgage lending activities outsourced by these firms.

The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent way by their lender and that long term resolution is sought by lenders with each of their borrowers. It sets out a process called the Mortgage Arrears Resolution Process (MARP).

The MARP is a four-step process which lenders must follow: Step 1: Communicate with the borrower; Step 2: Gather financial information; Step 3: Assess the borrower's circumstances; and Step 4: Propose a resolution.

As part of step 2 of MARP, a lender must use the prescribed standard financial statement (the SFS) to obtain financial information from a borrower in arrears or pre-arrears. The lender must provide the borrower with the SFS at the earliest possible opportunity and offer to assist the borrower with completing the SFS.

The completion of affordability assessments is a key step in the MARP - (Step 3). In this regard a lender must examine each case on its individual merits and it must base its assessment on the full circumstances of the borrower, including, inter alia, the information provided in the SFS.

In June 2015, the Central Bank published the outcome of a themed inspection of lenders' compliance with the CCMA. This is available at:

As part of this theme seven lenders were inspected under 4 keys area. The Themed review found that while all of the lenders had implemented frameworks as required by the CCMA, weaknesses of varying degrees were identified across a number of lenders as well as a number of good practices. One of the areas examined was in relation to the resolution of arrears in a timely manner and delays were identified in passing a copy of the completed SFS to the lenders arrears support unit (ASU) for assessment and the ASU assessing the SFS once received. All lenders that were subject to the CCMA themed inspection have provided responses to the issues raised with them. The Central Bank of Ireland continues to engage with these lenders as part of their on-going supervisory engagement to ensure compliance with the CCMA.

Lenders generally use the Insolvency Service of Ireland's reasonable living expenses as a basis for their own policy for living expenses.