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Central Bank of Ireland

Dáil Éireann Debate, Wednesday - 3 June 2020

Wednesday, 3 June 2020

Questions (84, 85)

Cian O'Callaghan

Question:

84. Deputy Cian O'Callaghan asked the Minister for Finance the way in which the Central Bank measure the impact its decisions are having on housing rights, equality and women; and if he will make a statement on the matter. [8966/20]

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Cian O'Callaghan

Question:

85. Deputy Cian O'Callaghan asked the Minister for Finance if he will request a quarterly report from the Central Bank to accompany the quarterly statistics on mortgage arrears on the impact its decisions are having on housing rights issues and disproportionate effects its supervisory actions are having on women in line with the recommendation from the A Lost Decade - Study on Mortgage Possession Court Lists in Ireland report; and if he will make a statement on the matter. [8967/20]

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Written answers

I propose to take Questions Nos. 84 and 85 together.

I have been advised by the Central Bank of Ireland (the Central Bank) that it is focused on promoting the welfare of the people of Ireland as a whole and, through membership of Europe’s Monetary and Banking Unions, the welfare of the wider people of Europe.

The Central Bank assures me that it is conscious of its responsibility in ensuring that the principles of human rights and equality are embedded across its work.

When conducting fundamental reviews of macroprudential policy framework, or specific instruments, including the mortgage measures, the Central Bank issues a public consultation or a call for evidence, where individuals or organisations can submit their views. The public consultations and calls for evidence are generally open for submissions on any issue related to the impact of the macroprudential framework or specific policies. This includes submissions related to discrimination, equality and human rights. The Macroprudential Measures Committee or the Central Bank Commission (depending on the policy instrument being considered) is presented with the outcomes of public consultation and any implications for policy development.

The Central Bank is committed to being a socially responsible and sustainable organisation in how it delivers on its mandate and mission. As a public service organisation, the Central Bank’s obligation to meet its public sector duty is a key part of this wider commitment. In preparing the Central Bank’s Strategic Plan, an assessment of the human rights and equality issues, relevant to the functions of the Central Bank, was carried out.

The Strategic Plan sets out that the Central Bank will ensure:

- The implementation of its People Strategy promotes and supports the equality and human rights of staff.

- Engagement with the public through communications and outreach strategies as part of its commitment to corporate and social responsibility.

- All members of the public who receive services from the Central Bank are provided a professional, efficient and courteous service as set out in the Customer Charter.

- The public is consulted on Central Bank policy developments and the obligations under the 2014 Act will be considered by the Central Bank, where relevant, in the development of such policies.

The Central Bank also plays a role in promoting sound governance and culture across its regulated entities through the publication of reports on key Diversity and Inclusion data.

While it is not my intention to request a report as suggested by the Deputy, he will be aware, within the remit of the Central Bank’s responsibilities for safeguarding stability and protecting consumers, its approach to mortgage arrears resolution is focused on ensuring the fair treatment of all borrowers through a strong consumer protection framework and ensuring that regulated entities have appropriate arrears resolution strategies and operations in place.

The Central Bank first introduced the Code of Conduct on Mortgage Arrears (CCMA) in 2009 in the midst of an economic and employment crisis to provide statutory safeguards for vulnerable, financially-distressed borrowers in arrears or at risk of falling into arrears on a primary residence. Further strengthened in subsequent years, the CCMA, and within it, the Mortgage Arrears Resolution Process (MARP), is just one part of the national policy framework of supports and protections to assist people with mortgage arrears difficulties.

The CCMA is a statutory Code put in place to ensure that regulated entities have fair and transparent processes in place for dealing with borrowers in or facing mortgage arrears. Within this process, due regard must be given to the fact that each case is unique and needs to be considered on its own merits. All cases must be handled sympathetically and positively by the regulated entity, with the objective at all times of assisting the borrower to meet his or her mortgage obligations. Regulated entities must comply with the CCMA as a matter of law.

Under the CCMA, a regulated entity may only commence legal proceedings for repossession where it has made every reasonable effort to agree an alternative repayment arrangement (ARA) with the borrower and other clear requirements are met or the borrower has been classified as not co-operating. This framework requires a regulated entity to exhaust the options available from its suite of ARAs before taking action which may result in the borrower losing his/her home (whether by voluntary sale or repossession). During the legal process, the borrower has the opportunity to re-engage with the regulated entity to find a solution. In some circumstances, however, loss of ownership may be unavoidable.

I would also like to draw the Deputy's attention to the Abhaile scheme, the aim of which is to ensure that people who are at risk of losing their homes get assistance to address their mortgage arrears and to help them wherever possible, to remain in their homes. The Insolvency Service of Ireland have stated that if a debtor can, at least, service the current market value of their home, irrespective of the mortgage balance, a Personal Insolvency Practitioner will be able to secure a permanent solution that returns the debtor to solvency and allow them remain in their family home. In over 90% of Personal Insolvency Arrangements, the debtor has remained in their home notwithstanding the fact that the majority of such cases were in long term arrears.

Finally, the Government is committed to assisting all its citizens who are in mortgage difficulties and even more so at this difficult time. The Banking and Payments Federation Ireland announced last week that it's members had 78,000 mortgage payment breaks in place for customers who are affected by the Covid-19 crisis. I would urge all those in difficulty to engage with their financial institution and with the Abhaile and Money Advice and Budgeting Services (MABS).

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