Since the COVID-19 situation first arose, I have maintained contact with the Banking and Payments Federation Ireland and lenders on the measures they have put in place to assist their customers who are economically impacted by the pandemic. The initial measures put in place included 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 Covid-19 crisis and ensured that a large number of affected customers could benefit quickly during a fast moving and unprecedented public health crisis.
Banking Payment Federation Ireland (BPFI) data at end of last year showed that 89% of PDH mortgage accounts with expired COVID-19 payment breaks had returned to full repayments on the existing term or on an extended term. For people who availed of pandemic unemployment payments and as a result were placed in a position that they were required to restructure credit arrangements or who are otherwise experiencing loan repayment difficulties, the Central Bank has advised that it is working to ensure lenders are acting in a way that protects the best interests of borrowers, and in line with relevant codes and regulations, including the Code of Conduct on Mortgage Arrears.
The Central Bank’s clear expectation is that lenders engage effectively and sympathetically with distressed borrowers – in line with the Code of Conduct on Mortgage Arrears, the Consumer Protection Code and regulations for lenders lending to SMEs – to deliver appropriate and sustainable solutions. These solutions should be tailored to the financial circumstances of each borrower and the lender’s objective should be to facilitate as many borrowers as possible to return to repaying their debt. Borrowers who continue to experience financial distress should therefore engage early with their lenders, who have specific obligations to support borrowers. Also, borrowers should consider what they can pay and should be cautious about accruing significant amounts of arrears where it is not necessary.