Catherine Murphy (Kildare North, Social Democrats)
Link to this: Individually | In context | Oireachtas source

98. To ask the Minister for Finance if he and or his officials have engaged with lending institutions here in respect of persons that availed of pandemic unemployment payments and as a result were placed in a position that they were required to restructure credit arrangements and as a result had negative credit rating applied to them over the course of 2020 and 2021; and if so, his plans to remedy this situation. [50347/21]

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

Since the Covid-19 situation first arose, I have maintained contact with the BPFI and lenders on the measures they have put in place to assist their customers who are or were economically impacted by the pandemic. In relation to the issue of persons that availed of pandemic unemployment payments and as a result were placed in a position that they were required to restructure credit arrangements, the Central Bank has advised that it is working to ensure lenders are acting in a way that protects the best interests of borrowers, and in line with relevant codes and regulations. Through ongoing engagement with lenders, the Central Bank is working to ensure that borrowers who continue to be affected by the economic issues surrounding Covid-19 are supported through this period of unprecedented stress.

The Central Bank has stated that its clear expectation is 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 that are tailored to the needs of the individual borrower and which facilitate as many borrowers as possible to return to repaying their debt.

Lenders also have an obligation to report credit information to the Central Credit Register (CCR). In relation to the impact of Covid-19 payment breaks on the CCR, the Central Bank made it clear to all lenders that either a full or partial payment break agreed between a lender and a borrower as a response to Covid-19 was not, in itself, an event that was reportable to the CCR. Furthermore, it also indicated that a Covid-19 payment break agreed between a lender and a borrower as a response to Covid-19 should not have be reported to the CCR as either a “missed payment” or as a “restructure event”. While the general Covid-19 payment break scheme operated by the members of the Banking and Payments Federation of Ireland in 2020 has ceased, support and assistance, which can include payment breaks, can still be agreed between borrowers and lenders on a case by case basis where necessary and appropriate. Also, it should be noted that the CCR does not produce credit ratings; rather the information on a credit report provided by the CCR is factual in nature. Credit reports contain no guidance, recommendation or prohibition for lenders on what decision they should make on an application for credit or repayment arrangements agreed with borrowers. Subject to complying with applicable law and regulatory requirements, it is a matter for lenders to make their own lending decisions in accordance with their own credit policies and risk appetites. Borrowers may access their credit report free of charge (subject to fair usage) from the CCR.