Dáil Éireann Debate, Wednesday - 18 June 2014
42. Deputy Dominic Hannigan asked the Minister for Finance the steps the Central Bank of Ireland takes to ensure that each bank is complying with its various codes of conduct with regard to distressed residential and buy-to-let borrowers; and if he will make a statement on the matter. [26315/14]
View answerAll Codes of Conduct issued by the Central Bank, including the Consumer Protection Code (CPC) and the Code of Conduct on Mortgage Arrears (CCMA), are imposed on a statutory basis on regulated firms. Consequently, any firm to whom any such Code applies must, as a matter of law, comply with the rules contained in those Codes.
The Central Bank informs me that it monitors compliance with consumer protection requirements through its on-going engagement with firms, reviews and research, mystery shopping and advertising monitoring and that the Central Bank regularly conducts themed inspections, which examine issues across a sector, to ensure compliance with all of its codes of conducts, including the CCMA. Where a specific compliance issue arises with an individual firm, this is addressed directly with the firm and where appropriate, regulatory action may be taken. Breaches of regulatory requirements are dealt with in accordance with the Central Bank Administrative Sanctions procedure. To promote compliance, the Central Bank provides feedback on themed inspections and publishes the main issues on its website.
The Central Bank has conducted a number of themed inspections on the CCMA since its introduction in 2009, including:
- 2010 inspection conducted on specific provisions of the CCMA regarding the issuing of formal demand letters, applications to the Courts to commence enforcement of legal action on repossession of a borrower's primary residence and entering arrangements.
- 2011 inspection which examined compliance with the requirement of CCMA specifically relating to charges on mortgage accounts in arrears.
- 2012 inspection which examined compliance with the CCMA requirements relating to contact with borrowers and the appeals process required under the CCMA.
Details of all themed inspections on the CCMA and feedback can be found at the following link: http://www.centralbank.ie/regulation/processes/consumer-protection-code/compliance-monitoring/Pages/themed-inspection.aspx
In 2013, the Central Bank undertook a review of practices by credit institutions in areas of the arrears process covered by the CCMA to inform the review of the CCMA which was conducted in 2013. This review focused on the current and proposed use of dialler technology in respect of customer contact. In 2013 the Central Bank also conducted independent research into the experience of borrowers facing or in mortgage arrears who are engaging in the CCMA's Mortgage Arrears Resolution Process (MARP). Borrowers surveyed were generally positive about their overall experience when interacting with their lenders during the MARP process, with 73% of borrowers indicating that their lender had been professional in its dealing with them, and 64% noting their lender's helpfulness. In addition, it also found:-
- 71% of borrowers were positive about the ease of completing the Standard Financial Statement ('SFS') lenders must use to gather financial information on a borrower's circumstances in order to inform any new arrears arrangements;
- 71% of borrowers surveyed had entered into an alternative arrangement with their lender as a result of MARP and 80% of those completing an SFS entered a revised agreement;
- of the 10% of borrowers who used the MARP's Appeals process, 60% stated that they had successfully negotiated a more suitable/sustainable arrangement;
- a third of consumers claimed that their lender did not have a discussion with them regarding other debts.
Following the introduction of the revised CCMA on 1 July 2013, the Central Bank requested all mortgage lenders to have revised CCMA implementation plans in place detailing the corporate governance arrangements surrounding the plan (including senior management oversight), changes to systems required to implement the revised CCMA and staff training required to ensure compliance with the revised CCMA by the end 2013.
The Central Bank's plan for themed inspections in 2014 includes an inspection of mortgage lenders to test compliance with the revised CCMA. I am also informed that compliance with the CCMA is also a Central Bank enforcement priority for 2014.
