Dáil Éireann Debate, Thursday - 23 June 2016
38. Deputy Clare Daly asked the Minister for Finance if he believes that the framework agreement between the State and the banks is fit for purpose, given the numbers of repossession cases and manner in which they have been handled; and if he will make a statement on the matter. [17495/16]
View answerThe Relationship Framework documents for AIB, Bank of Ireland and Permanent TSB were specified and published in March 2012, while Permanent TSB's was also amended on 23 April 2015.
The framework documents, which generally formed part of the recapitalisation agreements, define the relationship between the Minister and the relevant institution. These documents are drafted and structured to ensure that the institutions will operate on a commercial basis and independent of the Minister in respect of their day to day operations. The role of the Minister is also set out and reflects his shareholding in the relevant institution and also the other support provided to that institution.
As a result the Minister has no statutory function in relation to the day to day banking decisions made by individual lending institutions at any particular time and these are taken by the board and management of the relevant institution.
However from a general policy perspective, the approach of the Government is to support people in genuine mortgage arrears and where feasible, to put in place a sustainable restructure to address and resolve such a difficulty. This is clearly set out in the Code of Conduct on Mortgage Arrears where it requires a lender in respect of a cooperating borrower to explore all of the options for an alternative repayment arrangement offered by that lender and that a lender must document its consideration of each option examined and the reasons why the options offered or not offered to the borrower are, or are not appropriate and sustainable.
If a solution cannot be agreed between borrower and lender, or if it is agreed that a mortgage restructure is not a sustainable solution, there are alternative mechanisms available to allow a debtor remain in the house in appropriate cases. For example, the Mortgage to Rent scheme is available in cases where the house and household would be appropriate and eligible for social housing. Where the borrower and lender cannot agree on a sustainable mortgage restructure, the debtor has the option to formulate and propose a PIA to his/her secured and other creditor(s). This initiative rests solely with the debtor and in formulating a PIA, a personal insolvency practitioner is under an onus, insofar as is reasonably practicable, to formulate the proposal on terms that will not require the debtor to dispose of an interest in or cease to occupy a principal private residence.
