Dáil Éireann Debate, Thursday - 15 November 2012
39. Deputy John Browne asked the Minister for Finance if he is satisfied with the manner in which banks operate the standard financial statement for customers in financial distress; if there is commonly applied definition of necessary living costs; and if he will make a statement on the matter. [50483/12]
View answerI have been advised by the Central Bank that one of the recommendations of the Expert Group on Mortgage Arrears and Personal Debt was that “a Standard Financial Statement (SFS) should be developed for use by all lenders and MABS, to assess a borrower’s financial position and to identify a best course of action”. A standard format for the SFS was developed by the IBF and MABS and approved by the Central Bank in 2011. All lenders are required to use this SFS when dealing with consumers under the Mortgage Arrears Resolution Process (MARP) as set out in the Code of Conduct on Mortgage Arrears (CCMA). The SFS is a key component to the effectiveness of the MARP as it requires consumers to objectively assess their incomings and outgoings, assets and liabilities and it provides the lender with valuable information regarding the financial position of the borrower. The standard format for the SFS requires a comprehensive review of the borrower’s financial position and brings increased consistency to the process and ensures that all assessments of a borrower’s case are based on a common analysis of their financial circumstances.
Guidance has been prepared for consumers by MABS and the Central Bank which informs the borrower of the importance of completing the SFS and also the commitment of their lender to assist them with the process.
The Central Bank has undertaken to conduct a review of the CCMA to commence in 2013, and any operational issues that arise with this standard SFS will be addressed on this basis.
There is currently no commonly applied definition of necessary living costs in use by mortgage lenders. Each case is different and has to be examined on its own merits and circumstance of the person or family involved.
