Michael Healy-Rae (Kerry, Independent)
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220. To ask the Minister for Finance his views on whether legislation should be introduced to stop repossession proceedings on tracker-related mortgages until all affected customers are redressed (details supplied); and if he will make a statement on the matter. [46357/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware, the Central Bank is independent in the performance of its duties in the supervision of regulated financial service providers and it is working to ensure the Tracker Mortgage Examination is completed as soon as possible. The Government fully supports the Central Bank in the performance of its duties and has asked the Central Bank to provide a progress report on the examination in December based on the timelines the Bank has set for each lender.

In addition, as Minister for Finance I have mandated the Central Bank under section 6A of the Central Bank Act 1942 to prepare a report on the following:

- the current culture and behaviour and the associated risks in the retail banks, and

- the actions that may be taken to ensure that banks prioritise customer interests in the future.

On receipt of this report, the Government will determine whether any additional legislative and regulatory changes are needed that would enhance accountability in the banks to ensure customer interests are prioritised.

It should also be noted that in line with the Central Bank’s mandate to ensure that the best interests of consumers are protected, the immediate focus of the Tracker Mortgage Examination is to ensure that lenders prioritise the identification of impacted customers, stop the harm, and then provide appropriate redress and compensation in line with the ‘Principles for Redress’ developed by the Central Bank.

The lender is to take appropriate steps to ensure that any harm potentially being caused to impacted customers is stopped at the earliest possible time after a potential relevant issue is identified, as follows:

1. The lender is to cease charging the incorrect rates of interest to potentially impacted cohorts of customer accounts and to apply correct rates of interest to those accounts after each cohort is identified and to inform the Central Bank in advance of doing so.

2. The Central Bank expects that lenders will not take steps in the legal process (including issuing demand letters) and will implement controls and/or measures to ensure that potentially impacted customers do not lose possession of their properties during the period from when the potential relevant issue is identified until the lender satisfies itself that potentially impacted accounts are not in fact impacted by the issue or redress and compensation occurs. Such controls and measures may include, but are not limited to, pausing legal activity and repossessions of properties and informing customers that wish to undertake assisted voluntary surrenders of their properties, of the possibility that they may be included in a redress scheme in the future.

3. Where the lender is satisfied that a potentially impacted account is not impacted by the potential relevant issue or any other relevant issue, it may cease to apply the said controls and measures to the account. The lender is to put appropriate systems in place regarding decisions to cease to apply such controls and measures. As part of this process, senior management is to approve any decision to cease to apply the controls and measures to an account in advance of the controls and measures being dis-applied.

4. Before the lender takes any steps against customers that it has not previously identified as being affected by the potential relevant issue that may result in such customers losing possession of their properties (for example by commencing or advancing legal proceedings to take possession of the properties), or before the lender facilitates such customers in the sale of their properties (for example by way of assisted voluntary sale), the lender is to satisfy itself that such customers are not affected by the potential relevant issue or any other relevant issue.

5. The lender to put appropriate systems in place regarding the process by which it satisfies itself in this regard. As part of the process, senior management need to be satisfied that such customers are not affected by the potential relevant issue or any other relevant issue.

Where there is doubt regarding whether or not the potentially impacted customers are in fact impacted by potentially relevant issues or any other issues, lenders should not take steps in the legal process (including issuing demand letters) until lenders are satisfied that it is fully in order to proceed.