Dáil Éireann Debate, Thursday - 19 November 2020
132. Deputy Ged Nash asked the Minister for Finance his views on whether it is fair and proper that a bank (details supplied) in which the State owns a significant share is informing customers that their credit history will be negatively affected with the application of a Covid-19 payment break; if payment breaks can only be applied once throughout the lifecycle of a mortgage; and if he will make a statement on the matter. [37615/20]
View answerAs the Deputy is aware as Minister for Finance I have no role in the commercial decisions made by the banks, including the structure and level of pricing for their various product offerings. This applies equally to the banks in which the State has a shareholding.
Decisions in this regard are the sole responsibility of the board and management of the banks which must be run on an independent and commercial basis. The independence of banks in which the State has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.
AIB has provided me with the following statement:
"The Irish banking industry responded rapidly to the pandemic by implementing one of the most extensive payment break programmes in Europe, available to all customers impacted by Covid-19.
"These moratoria do not trigger a forbearance classification, in line with the European Banking Authority (EBA) guidelines on moratoria applied in the light of Covid-19, issued on April 2, 2020.
"On September 21st, 2020, the EBA issued further guidance on the phasing out of payment breaks. After the deadline of September 30th 2020, banks can continue to support customers with payment breaks but such cases are subject to the standard prudential framework and assessed for forbearance.
"Payment breaks provided short term relief for customers who suffered a temporary income reduction, but where a customer suffers an income impact over a prolonged period, a longer term sustainable solution may be required. This does not diminish the possibility of the bank granting payment break extensions where appropriate on a case by case basis.
"The bank’s focus is on engagement, assessment, and solutions for those most impacted financially by the Covid-19 pandemic and agreeing individually tailored plans that will help customers manage what is a challenging and stressful situation."
