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Covid-19 Pandemic

Dáil Éireann Debate, Wednesday - 13 January 2021

Wednesday, 13 January 2021

Questions (245, 247, 249)

Seán Haughey

Question:

245. Deputy Seán Haughey asked the Minister for Finance if he will intervene with a federation (details supplied) and the five main retail banks to request that flexible arrangements are put in place for borrowers in difficulty with mortgage and loan repayments due to the third wave of the Covid-19 pandemic; if new payment breaks can be put in place; the role of the Central Bank regarding this issue; and if he will make a statement on the matter. [1386/21]

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Michael Healy-Rae

Question:

247. Deputy Michael Healy-Rae asked the Minister for Finance if a new moratorium on mortgages will be instituted (details supplied); and if he will make a statement on the matter. [1454/21]

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Joe O'Brien

Question:

249. Deputy Joe O'Brien asked the Minister for Finance if he has re-engaged with a group (details supplied) in relation to the introduction of a further payment break for borrowers in view of the decision by the European Banking Authority to reactivate its guidelines on legislative and non-legislative moratoria; and if he will make a statement on the matter. [1554/21]

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Written answers

I propose to take Questions Nos. 245, 247 and 249 together.

On 18 March last the Banking and Payments Federation of Ireland (BPFI) announced a coordinated approach by banks and other lenders to help their customers who were economically impacted by the Covid-19 crisis.  The measures included flexible loan repayment arrangements where needed, including loan payment breaks initially for a period up to three months and then subsequently extended for up to six months. The implementation of this voluntary moratorium by the banking industry was a flexible response to the emerging COVID-19 crisis and ensured that a large volume of affected customers could benefit quickly during a fast moving and evolving public health crisis.

While many borrowers whose payment break has ended have been able to return to full payments, it is also recognised that many borrowers continue to be impacted by the economic consequences of Covid-19 and they may not be in a position to resume their loan repayment commitments when their payment break ends or may now be in difficulty for the first time. 

On the question of whether new payment breaks can be put in place, the Central Bank has confirmed that there is no regulatory impediment to lenders offering payment breaks to borrowers, providing they are appropriate for the individual borrower circumstance.  The BPFI has also reiterated in recent days that standard payment breaks continue to be part of the wide range of tailored solutions which are being made available to customers upon assessment of their situation.

Borrowers have a suite of regulatory protections, such as the Central Bank's Code of Conduct on Mortgage Arrears, the Consumer Protection Code and the SME lending regulations, and lenders have specific obligations to support and work with borrowers who are continuing to experience loan difficulty because of Covid-19.  The options could include additional flexibility, and this could be a short term arrangement such as additional periods without payments or interest-only repayments, or if appropriate more long term arrangements.

Through ongoing engagement with the BPFI and lenders, the Central Bank is working to ensure that borrowers affected by COVID-19 continue to be supported through this period of unprecedented stress. The Central Bank recently wrote to all lenders indicating that lenders are to ensure that they have sufficient expert resources to assess individual borrower circumstances, and to offer appropriate and sustainable solutions to affected borrowers in a timely manner in line with regulatory requirements and Central Bank expectations.

I will continue to work with the Central Bank, as regulator, to ensure that the Central Bank consumer protection and other applicable frameworks will be fully available to all borrowers that will still need support.

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