Dáil Éireann Debate, Thursday - 17 December 2015
117. Deputy Michael McGrath asked the Minister for Finance the number of residential mortgages that are classified as sub-prime; the number of sub-prime lenders operating in the market; the value of outstanding sub-prime mortgages; the rate of arrears on these; the actions specific to the sub-prime sector that are being taken to address arrears; and if he will make a statement on the matter. [45831/15]
View answerThe Central Bank has advised me that it is important to note that there is no such regulated category as "sub-prime lender". However, Retail Credit Firms are authorised to provide credit, in the form of cash loans, directly to individuals (these firms are not licensed to accept deposits). Some firms authorised in this category are mortgage lenders. Retail Credit Firms have been subject to regulation by the Central Bank since 1 February 2008. A register of all Retail Credit Firms is available on the Central Bank website at http://registers.centralbank.ie/DownloadsPage.aspx. As at 14 December 2015, 16 retail credit firms were subject to regulation by the Central Bank.
The Central Bank's Residential Mortgage Arrears and Repossessions Statistics: Q3 2015, which can be viewed at http://www.centralbank.ie/polstats/stats/mortgagearrears/Documents/2015q3_ie_mortgage_arrears_statistics.pdf, details figures on 'Residential Mortgages issued by Non-Bank Entities for both PDH and BTL properties. In Q3 2015 there were 47,461 PDH and BTL mortgage accounts held by non-bank entities, with an associated outstanding balance of just under €8.76bn, and associated arrears of almost €5.37bn (61.3 per cent of total outstanding balance).
In light of their activities, Retail Credit Firms are not subject to the same prudential supervisory regime as licensed credit institutions but are subject to the same Consumer Protection framework requirements including the Central Bank's statutory Consumer Protection Code and the Code of Conduct on Mortgage Arrears ('CCMA').
The CCMA sets out requirements for all mortgage lenders, including Retail Credit Firms, dealing with borrowers in arrears or pre-arrears on a mortgage loan which is secured by their primary residence (as defined). It 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.
The Central Bank engages with Retail Credit Firms in relation to their treatment of borrowers under the Mortgage Arrears Resolution Process (MARP), as provided for in the CCMA. The MARP sets out the steps which lenders must follow, e.g. communicate with the borrower, gather financial information, assess the borrowers circumstances and propose a resolution.
