I propose to take Questions Nos. 206 and 208 together.
As statutory regulator of credit institutions, the Central Bank has the power, from both a prudential and consumer protection perspective, to require banks to meaningfully and sustainably address mortgage arrears cases on their books. The Deputies will be aware that the Central Bank's Mortgage Arrears Resolution Targets process, as announced in March 2013, sets time bound and measurable targets for the main banks requiring them to systematically address their arrears book. The targets cover both proposed and concluded sustainable solutions with respect to both the lenders principal dwelling homes (PDH) and buy-to-let (BTL) mortgagees. Under this rolling process, quarterly performance targets have so far been set to the end of June 2014 to require the banks to propose and put in place durable long-term solutions to address individual cases of mortgages in difficulty where the mortgage is more than 90 days in arrears. The Central Bank has concluded its audit and assessment of a sample of the banks' end 2013 target returns. Based on the information submitted, the Central Bank has advised that the banks have indicated they have proposed sufficient numbers of solutions to meet the targets of proposing solutions to 50% of those in arrears greater than 90 days and concluding 15% of these cases.
The consumer protection provisions of the Central Bank are contained within the Consumer Protection Code and the Code of Conduct on Mortgage Arrears (CCMA). In particular, the CCMA sets out requirements for mortgage lenders dealing with borrowers facing or in mortgage arrears on their PDH mortgage and it applies to all regulated mortgage lenders. The CCMA is issued under Section 117 of the Central Bank Act 1989 and lenders covered by the Code are required to comply with it as a matter of law. The Central Bank has the power to administer sanctions for a contravention of this Code.
On the BTL mortgage aspect, the Residential Tenancies Act 2004, which falls within the remit of the Minister for Housing and Planning, provides the main regulatory framework for the private rental sector and prescribes the statutory rights and obligations of landlords and tenants.
The Central Bank published the revised CCMA in June 2013. As part of the financial institutions' delivery of full implementation of the revised CCMA, the boards of directors of all mortgage lenders were required by the Central Bank to sign off that all of the provisions of the revised CCMA had been fully implemented and tested and that staff training had been completed. Compliance with the CCMA will continue to be central to the Central Bank's work programme throughout 2014 and an inspection of mortgage lenders to test compliance with the revised CCMA will be conducted later this year.
The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long-term resolution is sought by lenders with each of their borrowers. If a borrower is not happy with the way that their lender is dealing with them or if they think the lender is not complying with the CCMA, the borrower can make a complaint to their lender. Under the CCMA, borrowers have the right to appeal to the lender's Appeals Board if they are not happy with the alternative repayment arrangement offered or where a lender declines to offer an alternative repayment arrangement or if they believe they have been wrongly classified as not co-operating. If the borrower is not happy with the outcome of the appeal/complaint made to the lender they can refer the matter to the Financial Services Ombudsman.
The monthly mortgage restructures and arrears data published by my Department provide an impetus for those MART banks to increase the pace of provision of mortgage restructures. The latest publication, which is in respect of the end of February, shows that some progress has been made in putting permanent mortgage restructures in place. For example, the number of permanent restructures of buy-to-let mortgages more than 90 days in arrears has risen from around 5,600 in December to around 6,000 in February 2014. The data published by my Department, and the Central Bank quarterly mortgage arrears publications, would appear to demonstrate some progress by the lenders in addressing the accounts in arrears and putting in place appropriate measures to prevent borrowers from going into arrears.