Fergus O'Dowd (Louth, Fine Gael)
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56. To ask the Minister for Finance if he will respond to correspondence received (details supplied); and if he will make a statement on the matter. [42202/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy will be aware that my officials and I have engaged and will continue to engage extensively with the Banking and Payments Federation (BPFI) and the banks directly in relation to supports for personal and business customers affected by the COVID-19 pandemic. Officials in the Department are alert to issues raised directly by the public and these inform the Department’s ongoing engagement process and policy formation.  

The Wage Subsidy Schemes are some of the main tools with which we are protecting the income of employees who otherwise would not be working and it is hoped that it will be a major boost in saving the businesses for which they work. However, whilst I acknowledges the seriousness of the issue you have raised and its impact on those affected, I cannot mandate how temporary payments received under the Wage Subsidy Schemes are treated in lending sustainability evaluations by regulators and lenders. 

The banking crisis we faced over ten years ago was fueled by unsustainable lending. There are now thankfully far firmer regulatory controls and restrictions on lenders. Speaking on this particular issue, on 7 May the Governor of the Central Bank publicly noted that if an individual borrower’s circumstances have changed such that doubt is cast over the sustainability of potential borrowing, it is in the best interests of the borrower and the bank if the situation is reviewed.  

Furthermore, as Minister for Finance, I cannot mandate or overrule the internal risk assessment processes in any bank, even one in which the State has a shareholding. Decisions in this regard are the sole responsibility of the board and management of the banks which must be run on an independent and commercial basis. The independence of banks in which the State has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market. The Relationship Framework for PTSB, the bank referred to in correspondence supplied by the Deputy, can be found here: 

https://www.gov.ie/en/publication/5c6ad6-ptsb-relationship-framework-april-2015/  

Notwithstanding this, officials in the Department contacted the bank for a general comment, on a no-name basis, on how they are managing the matter you have raised and were advised of the following: 

"We have a duty of care to our customers to ensure that any lending is affordable for them. In accordance with consumer protection requirements, we are facilitating mortgage-approved customers on the EWSS in drawing down their loans subject to their employers providing assurance on the sustainability of their income when the EWSS comes to an end. We are also processing approval in principle applications from customers in receipt of the PUP and we are not excluding any sectors from applying for a loan. We are doing everything we can to support our customers at this difficult time and are working with them on a case by case basis to assess their individual situations."