Dáil Éireann Debate, Wednesday - 5 November 2014
64. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he or his Department has continued to monitor policy pursued by the financial institutions that have purchased loan books from various lenders; if excessive pressure is being applied to home owners with the first objective being surrender or repossession, with obvious consequences leading to homelessness; and if he will make a statement on the matter. [42347/14]
View answer69. Deputy Bernard J. Durkan asked the Minister for Finance if he is satisfied that regulated and unregulated loan book purchasers are affording adequate opportunity to home owners to restructure repayments and retain the family home. [42370/14]
View answerI propose to take Questions Nos. 64 and 69 together.
The Central Bank has confirmed to me that if a loan book is transferred from one regulated entity to another the various Central Bank of Ireland codes continue to apply (i.e. Consumer Protection Code and Code of Conduct on Mortgage Arrears (CCMA)).
By virtue of an exemption in Part V of the Central Bank Act 1997, an unregulated entity to whom a cash loan is transferred by a regulated entity is not subject to Central Bank supervision.
The Central Bank has consistently advocated for the consumer protections set out in financial services legislation to extend to borrowers whose loans are sold to unregulated entities.
I am pleased to inform the Deputy that the Government is committed to bringing forward legislation that protects consumers whose mortgages are sold to unregulated entities and that my Department has recently published the submissions it received in response to a public consultation process seeking views on this legislation. The objective of the legislation is "To ensure that borrowers whose loans are sold by a regulated entity to a currently unregulated entity maintain the same regulatory protections as they had prior to the sale, including under various Central Bank Codes (including the Code of Conduct on Mortgage Arrears (CCMA)". The Government is currently considering options on how best to achieve this objective and I anticipate that this legislation will be published by the end of this year.
I have informed this House previously that the Government has developed a comprehensive cross-Departmental strategy in response to the mortgage arrears issue in line with the main recommendations of the 2011 Keane Report. The implementation of this strategy is overseen at Government level by the Construction 2020, Housing, Planning and Mortgage Arrears sub-committee, which is chaired by the Taoiseach, and at official level by a mortgage arrears steering group which is chaired by the Department of Finance.
Taken together, the overall strategy and framework is in place to enable banks to work with distressed homeowners to reach sustainable solutions for dealing with their personal indebted situations. The data published by my Department, as well as the Central Bank data, would appear to demonstrate some success by the lenders in addressing the accounts in mortgage arrears, as well as measures to prevent borrowers from going into arrears. Nevertheless, relevant Departments and agencies will continue to keep the position under review and can make any further adaptions to the overall framework, as considered appropriate. Early and effective engagement between borrowers and lenders remains key to resolving most cases of mortgage difficulty. Where there is effective and meaningful engagement by all parties regarding a mortgage difficulty, the data show that an increasing number of durable long term mortgage restructures can and are being put in place. However, increased engagement by the financial institutions with borrowers in long-term arrears will be necessary to appropriately address unsustainable mortgage loans.
