Bríd Smith (Dublin South Central, People Before Profit Alliance)
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175. To ask the Minister for Finance the discussion he has had with banks and lending institutions on a moratorium for mortgage holders, and other borrowers, affected by the Covid-19 crisis; the details of the outcome of these meetings; and if he will make a statement on the matter. [9572/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I appreciate the stress and uncertainty that many borrowers are facing at this difficult time, and those borrowers who are experiencing difficulty in meeting their repayments will continue to need assistance and support from their lenders. In this regard it is the clear expectation of both the Government and the Central Bank that lenders engage effectively and sympathetically with distressed borrowers – in line with the Code of Conduct on Mortgage Arrears, the Consumer Protection Code and regulations for lenders lending to SMEs – to deliver appropriate and sustainable solutions and facilitate as many borrowers as possible to return to repaying their debt.

The Banking and Payments Federation of Ireland (BPFI) stated last month that its members are continuing to commit significant resources to support customers impacted by COVID-19, and in particular those who are affected by the latest restrictions. Through ongoing engagement with the BPFI and lenders, the Central Bank is working to ensure that borrowers affected by COVID-19 continue to be supported through this period of unprecedented stress.

Borrowers have a suite of regulatory protections, and lenders have specific obligations to support and work with borrowers who are continuing to experience loan difficulty because of COVID-19. Rather than continuing with a general 'one size fits all' forbearance approach, it is considered that it is in the best long term interests of both the borrower and lender that engagement takes place in relation to a particular loan difficulty and that the most appropriate solution to the individual case is adopted as soon as possible. The options could include additional flexibility, and this could be a short term arrangement such as additional periods without payments or interest-only repayments, or if appropriate more long term arrangements.

The Central Bank has indicated to lenders that they should ensure that they have sufficient expert resources to assess individual borrower circumstances, and to offer appropriate and sustainable solutions to affected borrowers in a timely manner in line with regulatory requirements and Central Bank expectations. The Central Bank has also confirmed that there is no regulatory impediment to lenders offering payment breaks to borrowers at this time, providing they are appropriate for the individual borrower circumstance.

I will continue to work with the Central Bank, as regulator, to ensure that the Central Bank consumer protection and other applicable frameworks will be fully available to all borrowers that will still need support.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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176. To ask the Minister for Finance if his attention has been drawn to the fact that banks and lending institutions may be penalising mortgage holders and other borrowers who avail of a moratorium in repayments specifically and that some are subsequently being refused access to certain services, are unable to change lender and are otherwise facing withdrawal of possible services as a result of the moratorium; and if he will make a statement on the matter. [9573/21]

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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177. To ask the Minister for Finance if he will arrange to meet urgently with banks and lenders that have operated a moratorium for mortgage holders and other borrowers who have been impacted by the Covid-19 crisis and urge them to ensure there is no subsequent discrimination against those who avail of the moratorium; and if he will make a statement on the matter. [9574/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 176 and 177 together.

It is the clear expectation of both the Government and the Central Bank that lenders engage effectively and sympathetically with distressed borrowers to deliver appropriate and sustainable solutions and treat borrowers at all times, including in response to COVID-19, in line with Central Bank’s robust consumer protection framework.

In relation to the refusal of certain services, it is unclear to which particular services the Deputy is referring. However, insofar as it applies to the provision of mortgage credit to consumers, it should be noted that there are a number of consumer protection regulatory requirements on regulated entities. The European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate.

In addition, the Central Bank's Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability' requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. The Code specifies that the affordability assessment must include consideration of the information gathered on the borrower’s personal circumstances and financial situation.

Within this regulatory framework the decision to grant or refuse an individual application for credit is then a commercial decision to be made by the regulated entity. In the same way, the regulated entity will solely determine its own credit policies in line with its own risk appetite. Nevertheless, in considering applications for credit from consumers, the Central Bank has indicated that it expects lenders to assess credit applications in a sympathetic but prudent manner, ensuring at all times that the credit applicant has the means and ability to repay the proposed credit in line with the terms of the proposed credit contract. In this regard, whether an applicant for credit has had a payment break in the past should not in itself be decisive or determinative. Lenders should look at an applicant’s overall financial position, and satisfy themselves that the applicant has the means and ability to repay the proposed credit in line with the terms of the proposed credit contract.

However, If a bank customer is not satisfied with how a regulated firm is dealing with them in relation to the provision of credit or any other financial service, or they believe that the regulated firm is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated firm. If they are not satisfied with the response from the regulated firm, they can refer the complaint to the Financial Services and Pensions Ombudsman.

Overall I expect regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic. I will also continue to work with the Central Bank, and indeed also maintain contact with the main lenders, to ensure that appropriate arrangements and supports will be available for borrowers and other financial customers who continue to be impacted by COVID-19.