Thursday, 5 March 2020
Department of Finance
Code of Conduct on Mortgage Arrears
79. To ask the Minister for Finance if he is satisfied that regulated retail credit firms and credit servicing firms dealing with mortgages are adequately staffed to deal with the amount of accounts they have to manage; the length of time regarded as an acceptable period for such a firm to assess a completed standard financial statement form from a customer before conveying a decision; his views on the fact it is taking over a year in some cases for a completed standard financial statement form to be assessed; and if he will make a statement on the matter. [2761/20]
I have been advised by the Central Bank of Ireland (the Central Bank) that in 2015, they completed a themed inspection of compliance with certain aspects of the Code of Conduct on Mortgage Arrears 2013 (CCMA). They found significant and undue delays on the part of some lenders in assessing cases at various stages in the Mortgage Arrears Resolution Process (MARP). Additionally, they found that while firms had policies and processes in place for progressing a borrower’s case once a completed Standard Financial Statement (SFS) had been received, it was evident in some firms that these processes were not robust and stringent enough to prevent delays. In recognition of the time it may take to complete and assess the SFS and the potential deterioration in a borrower’s arrears situation while this process is being carried out, the CCMA specifically allows a lender to agree a temporary arrangement with a borrower, for a limited period, sufficient to allow time for the lender to receive and complete a full review of the SFS.
As a result of the Central Bank’s finding, firms were required to put in place the necessary resources, controls and procedures to ensure that borrowers did not experience any undue delays during the period between the borrower submitting the SFS for assessment and when the firm’s decision was communicated to the borrower. The Central Bank issued an industry letter outlining the outcomes and feedback from this themed inspection in 2015, a copy of the letter issued can be found on their website: www.centralbank.ie/docs/default-source/Regulation/consumer-protection/compliance-monitoring/themed-inspections/code-of-conduct-on-mortgage-arrears/gns4-2-1-2-ccma-ind-ltr.pdf)
The Central Bank also published Requirements and Standards for Credit Servicing Firms: (www.centralbank.ie/docs/default-source/regulation/industry-market-sectors/credit-servicing-firms/legislation/gns-4-4-4authorisation-creditservicingfirms.pdf?sfvrsn=5) in January 2019 and Requirements and Standards for :() in 2017, which require firms to have adequate staffing in place and to ensure that relevant members of staff are fit and proper and have appropriate experience and skills. All firms seeking authorisation as a Credit Servicing Firm or Retail Credit Firm are required to demonstrate to the Central Bank that they are in a position to meet each of the requirements set out prior to being authorised. The Requirements and Standards must also be complied with on an on-going basis.
In addition, the Central Bank’s statutory codes of conduct including the Consumer Protection Code 2012 (CPC) requires firms to ensure it has and employs effectively the resources, policies and procedures necessary for compliance with the CPC.
The CCMA requires that lenders have fair and transparent processes in place for dealing with borrowers in or facing mortgage arrears. Provision 17 of the CCMA requires a lender to establish a centralised and dedicated Arrears Support Unit (ASU), which must be adequately staffed, to manage cases under the MARP. Furthermore, Provision 35 requires that a completed SFS must be assessed in a timely manner by the lender’s ASU.
I would urge any customer who is not satisfied with the service being provided by their financial institution to firstly make a complaint to their financial institution and if they are not satisfied with the response received, to make a complaint to the Financial Services and Pensions Ombudsman. They can be contacted at www.fspo.ie or at 01 567 7000.