Robert Troy (Longford-Westmeath, Fianna Fail)
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230. To ask the Minister for Finance if, in light of a recent decision by Tullamore Circuit Court to instruct a vulture fund to offer fixed interest rates, he will engage with vulture funds operating in Ireland to ensure this option with be offered to all customers; and if he will make a statement on the matter. [24127/23]

Michael McGrath (Cork South Central, Fianna Fail)
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While individual insolvency proposals and arrangements are matters for the parties to a particular insolvency situation, I nevertheless welcome the judgement in the recent case to which the Deputy refers.

I believe that mortgage creditors should note that case and I would encourage mortgage creditors to consider all possible options to assist their borrowers experiencing mortgage difficulty and, both inside and outside the formal insolvency process, to agree fair and sustainable solutions with their customers in order to address individual cases of mortgage difficulty.

From a regulatory perspective, the Central Bank has put in place a range of measures in order to protect consumers who take out or have a mortgage. This consumer protection framework seeks to ensure that regulated entities are transparent and fair in all their dealings with their borrowers, and that borrowers are protected from the beginning to the end of the mortgage life cycle including at times when borrowers may find themselves in financial difficulties.

This consumer protection framework includes the various Central Bank statutory codes such as the Code of Conduct on Mortgage Arrears 2013 (CCMA) and all regulated entities, including retail credit firms and credit servicing firms, are required to comply with the provisions of these codes in their dealings with consumers.

The CCMA provides specific protections for borrowers in arrears or facing a prospect of arrears on a loan secured on a primary residence. In particular, a regulated entity must pro-actively encourage borrowers to engage with it about financial difficulties which may prevent the borrower from meeting his/her mortgage repayments. Also, where a borrower is experiencing repayment difficulty, a regulated entity must explore all of the options for alternative repayment arrangements (ARAs) offered by the entity to determine if a more suitable and sustainable repayment option is available based on the borrower’s individual circumstances.

However, in circumstances where the borrower is experiencing significant financial difficulty and is insolvent, and where it has not possible for the borrower and regulated entity to agree a sustainable ARA on a bilateral basis, the statutory personal insolvency system (which falls within the remit of the Minister for Justice) will be available to the borrower to deal with his/her insolvency.

This includes the Personal Insolvency Arrangement (PIA) framework option which will, in consultation with a personal insolvency practitioner, allow the debtor to make a formal proposal to his/her creditors to restructure his/her debts, including his/her secured debts and which can include a debt secured on a primary residence.

This PIA will provide an option, as an alternative to bankruptcy, to return the debtor to solvency in a way which will protect a reasonable standard of living for the debtor and his/her dependents and which is also fair to creditors in the circumstances of a particular case. If a PIA proposal which includes a debt secure on a primary residence is not acceptable to a sufficient majority of the creditors, it can still be approved by a court under the provisions of the Personal Insolvency (Amendment) Act 2015.

The terms of any individual PIA will be a matter, in the first instance for the debtor and his/her personal insolvency practitioner and then a matter for the creditors to accept or, failing creditor approval, for the courts if it deals with a debt secured on the debtor’s principal private residence.