Pearse Doherty (Donegal, Sinn Fein)
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85. To ask the Minister for Finance if he has considered legislation, as has been implemented in other EU jurisdictions, that would prohibit the accrual of debt for the period of moratorium for those availing of a mortgage moratorium or payment break; the way in which it would interact with European Banking Authority guidelines; and if he will make a statement on the matter. [10395/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, regulated entities in Ireland initially introduced a three-month payment moratorium on mortgages, and personal and business loans for customers affected by COVID-19 in March 2020. Since then regulated entities have also announced that they will make available a further three-month extension to the payment moratoria to customers that continue to be directly impacted by the fallout from the Covid-19 pandemic.

The European Banking Authority (EBA) issued ‘Guidelines on legislative and non-legislative moratoria on loan repayments applied in the light of the COVID-19 crisis’on the 2^ndof April 2020 which set out the requirements for public and private moratoria which if fulfilled, will help avoid the classification of exposures as forborne or defaulted under distressed restructuring.

I am informed by the Central Bank of Ireland it is possible that moratoria can be set up in such a way as to allow for suspending, postponing or reducing the payments of principal amounts, interest or of full instalments, for a predefined limited period of time. However, the guidelines do not allow for other terms and conditions of the loans, such as the interest rate, to be altered.

The payment moratoria announced by Industry is compatible with the European Banking Authority Guidelines and was developed and implemented quickly in response to COVID-19. The agreement of a voluntary moratorium by industry ensures that affected customers could benefit immediately without the need for legislation, which may have delayed the provision of relief and exacerbated the issues faced by customers.

I understand that the Central Bank of Ireland continues to engage with the Banking and Payments Federation Ireland (BPFI) and with firms themselves to ensure the effective implementation of these payment breaks. Credit unions are also supporting requests from their members, on a case-by-case basis.