Tommy Broughan (Dublin Bay North, Independent)
Link to this: Individually | In context | Oireachtas source

92. To ask the Minister for Finance if he will report on the Central Bank's invigilation of the management of mortgage arrears by sub-prime lenders; and if he will make a statement on the matter. [51380/17]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Central Bank of Ireland (Central Bank) has informed me that various lenders offer loans where the interest rate is higher than that generally charged in the market. Although these lenders are commonly referred to as ‘sub-prime lenders’, there is no such regulated category as ‘sub-prime lender’. 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.  Retail Credit Firms have been subject to regulation by the Central Bank since 1 February 2008.  A register of all Retail Credit Firms is available on the Central Bank website at the following link:

. 

In light of their activities, Retail Credit Firms are not subject to the same prudential supervisory regime as licensed credit institutions but are subject to the same Consumer Protection framework requirements including the Central Bank’s statutory Consumer Protection Code and the Code of Conduct on Mortgage Arrears (‘CCMA’). 

The 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 (as defined).  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 engages with Retail Credit Firms in relation to their treatment of borrowers under the Mortgage Arrears Resolution Process (MARP), as provided for in the CCMA. The MARP sets out the steps which lenders must follow:

Step 1: Communicate with borrower;

Step 2: Gather financial information;

Step 3: Assess the borrowers circumstances; and

Step 4: Propose a resolution.

The Central Bank monitors the level of short term and long term mortgage arrears and the level of restructures in relation to, inter alia, non-bank entities. The Central Bank’s Residential Mortgage Arrears and Repossessions Statistics detail figures on ‘Residential Mortgages held by Non-Bank Entities’. The latest figures relate to Q1, 2017 and were published on 8 June 2017  This data is available at the following link:

.