Michael McGrath (Cork South Central, Fianna Fail)
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140. To ask the Minister for Finance the methodologies used by each lender under the Central Bank's tracker mortgage examination to arrive at a redress rate of interest and compensation; the way in which the Central Bank determines such methodologies to be appropriate; and if he will make a statement on the matter. [15967/17]

Michael Noonan (Limerick City, Fine Gael)
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It is important to note that the Central Bank does not have the statutory power to compel lenders to implement redress and compensation programmes in respect of failures that occurred prior to the introduction of the Central Bank (Supervision and Enforcement) Act 2013. However, where customer detriment is identified, the Central Bank has advised that it has clearly articulated its expectations of lenders to provide appropriate redress and compensation to impacted customers in line with prescribed Principles for Redress.

Key elements of the Central Bank's expectations in respect of redress and compensation for impacted customers include:

- any harm is stopped at the earliest possible time after each group of impacted customers is identified;

- the interest rates applied to impacted customers' accounts revert to the appropriate tracker interest rate or impacted customers are given the opportunity to revert to such a rate where relevant;

- redress will be provided to impacted customers to return them to the position they would have been in had lenders' failures not occurred;

- reasonable compensation, that reflects the detriment suffered by individual customers, is provided;

- redress and compensation is to be paid to impacted customers up front at the point of offer and compensation cannot be reduced by virtue of a customer lodging an appeal;

- an additional payment is to be provided to impacted customers at the point of offer to enable them to take independent professional advice regarding the redress and compensation offers made to them;

- an independent appeals process is to be established to address complaints from customers who are dissatisfied with any aspect of the redress and compensation package that they receive from lenders; and

- lenders will undertake not to raise any time limit defences that may otherwise apply if impacted customers make complaints to the Financial Services Ombudsman (the "FSO") or initiate proceedings before the courts.

The Principles for Redress are designed to ensure that impacted customers receive appropriate redress and compensation in a timely manner. The appeals element of the Principles for Redress ensures that customers have an option to challenge any aspect of the redress and compensation package, which is additional to the options of bringing a complaint to the FSO or initiating court proceedings.

Michael McGrath (Cork South Central, Fianna Fail)
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141. To ask the Minister for Finance if timelines have been set for the completion of each of the four phases in the Central Bank's tracker mortgage examination; if lenders will be penalised for not completing these phases on time; and if he will make a statement on the matter. [15968/17]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank has advised that it requires lenders to complete the Examination in four phases as follows:

- Phase 1: Development and Submission of Detailed Plan;

- Phase 2: Information Gathering/Review/Report Submission;

- Phase 3: Calculation of Redress and Compensation (where relevant); and

- Phase 4: Implementation of Redress Programme (where relevant).

Phase 1 of the Examination is now complete.

Phase 2 of the Examination is on-going. As at December 2016, nine lenders have submitted Phase 2 reports.  The remainder are still engaged in their Phase 2 reviews and interim reports/status updates have been provided as appropriate. The Central Bank invoked its powers under Section 22 of the Central Bank (Supervision and Enforcement) Act 2013 to set specific timelines for lenders to complete Phase 2 of the Examination, the last of which will be completed by no later than end September 2017. By this date, the Central Bank expects all lenders to have identified all impacted accounts and have commenced engagement with most impacted customers. The Central Bank will be rigorously monitoring the completion of this work.

While the Central Bank expects that Phase 2 will be completed by end September 2017, payment of redress and compensation by the lenders and the Central Bank's assurance work will continue beyond this point for some lenders. The Central Bank expects lenders to commence Phases 3 and 4 as impacted customers are identified. It is important to note that Phases 3 and 4 (calculation of redress and compensation and implementation of the redress programme) can run concurrently with Phase 2. 

The Central Bank will take appropriate supervisory action, up to and including enforcement action where necessary, in order to ensure lenders deliver fair outcomes for impacted customers. Enforcement activity will be influenced by the outcome of the reviews currently being conducted as part of the Examination.