Mortgage Data

Ceisteanna (175)

Michael McGrath

Ceist:

175. Deputy Michael McGrath asked the Minister for Finance the number of the 2,329 restructured PDH mortgages in the Central Bank mortgage arrears statistics for the quarter ended 30 September 2017 owned by unregulated loan owners in which the restructure was entered into by the unregulated loan owner as distinct from the unregulated loan owner inheriting a restructure entered into between the borrower and the previous loan owner; and if he will make a statement on the matter. [9644/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I have been informed by the Central Bank of Ireland that their Mortgage Arrears and Repossessions Statistics collect the number of new restructured accounts per quarter, (including new restructures and further modifications of existing restructures), as well as the stock of restructured account. The Central Bank have stated that it is not possible to split restructures out between those inherited and those implemented by the new loan owners.

Mortgage Data

Ceisteanna (176)

Michael McGrath

Ceist:

176. Deputy Michael McGrath asked the Minister for Finance the number of the 449 restructured BTL mortgages in the Central Bank mortgage arrears statistics for the quarter ended 30 September 2017 owned by unregulated loan owners in which the restructure was entered into by the unregulated loan owner as distinct from the unregulated loan owner inheriting a restructure entered into between the borrower and the previous loan owner; and if he will make a statement on the matter. [9645/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I have been advised by the Central Bank of Ireland that their Mortgage Arrears and Repossessions Statistics collect the number of new restructured accounts per quarter, (including new restructures and further modifications of existing restructures), as well as the stock of restructured account. However, the Central Bank have stated that it is not possible to split restructures out between those inherited and those implemented by the new loan owners.

European Financial Forum

Ceisteanna (177)

Mary Lou McDonald

Ceist:

177. Deputy Mary Lou McDonald asked the Minister for Finance if he will report on his address to the European Financial Forum on 31 January 2018. [7228/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The third annual European Financial Forum (EFF) was held on 31 January 2018 in Dublin Castle under the heading of "Building a New Future for International Financial Services". The event, which was hosted by my colleague Minister of State for Financial Services and Insurance Michael D’Arcy TD, is now in its third year and is a key deliverable as part of the Government’s International Financial Services 2020 (IFS2020) Strategy. The organisation and execution of the Forum is the responsibility of IDA Ireland, with input where required from Departments and agencies as part of IFS2020.

The international financial services (IFS) industry is an important pillar of the Irish economy, directly employing over 42,000 people across the country. The employment is a mix of those working for international firms that have chosen to locate activities in Ireland and indigenous Irish firms that export internationally traded financial services.

The current Government Strategy for the IFS sector, IFS2020, was developed in 2015 to address the challenges of growing the sector at a time of unprecedented change. The IFS2020 Strategy is led by Minister D’Arcy with the purpose of protecting and growing employment in IFS companies in the IDA and Enterprise Ireland portfolio. The vision of IFS2020 is for Ireland to be the location of choice for specialist international financial services, building on our strengths in talent, technology, innovation and excellent client services, while focusing on capturing new opportunities in a changing market and embracing the highest forms of governance.

The EFF 2018 was a tremendous success with over 700 domestic and international delegates in attendance. The core function of the event is to promote Ireland as a location for IFS. This is achieved by bringing together the leading organisations in the public and private sector to discuss the future of the European financial system. In doing so, the Forum highlights the commitment of the Government of Ireland to the European project and the range of IFS activities that are carried out from here. The Forum also highlights the commitment of the Government of Ireland to the sector and the partnership approach it adopts with industry to grow the sector in Dublin and throughout the country.

The 2018 Forum was opened by An Taoiseach and featured keynote addresses from Philip Lane; Governor of the Central Bank of Ireland, Colm Kelleher; President of Morgan Stanley, and Benoît Cœuré; Member of the Executive Board of the European Central Bank to name a few.

As part of the Forum, I had the pleasure of delivering a keynote closing address and having an on-stage conversation alongside Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union at the European Commission. This provided the opportunity for both the Vice President and I to share our perspectives on the policy and regulatory developments impacting financial services in Europe today and in the year ahead. It was particularly notable as the Vice President delivered his first public remarks on the final report of the High Level Expert Group on Sustainable Finance, an area of key importance for the future of finance. Ireland offers a unique blend of expertise and a proven track record in the area of green and sustainable finance, with a globally-recognised cluster of talent in renewable energy finance and experience in green asset management, and I welcomed the Vice President’s statement.

The European Financial Forum, as a Government-led initiative, is a unique event that is emerging as a fixture in the international media. Having the Forum as an annual event serves as a focal point for the work of the IFS2020 strategy and provides a platform to respond to significant events such as Brexit.

Preliminary planning for the 2019 Forum is currently underway, led once again by IDA Ireland. We hope that the 2019 EFF will build on the continued success of the EFF as a showcase for Ireland’s financial services environment and Ireland as a location for high-quality investment.

Motor Insurance Claims

Ceisteanna (178)

Pearse Doherty

Ceist:

178. Deputy Pearse Doherty asked the Minister for Finance the status of claimants in respect of a company (details supplied); when they can expect to receive 100% of claims as announced; and if he will make a statement on the matter. [9784/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Setanta was placed into liquidation by the Malta Financial Services Authority on 30 April 2014. As it was a Maltese incorporated company, the liquidation is being carried out under Maltese law.

The Deputy will be aware that under the Insurance Act 1964, as amended, monies may be paid out of the Insurance Compensation Fund (ICF), with the approval of the High Court, in relation to an insolvent insurer, to meet claims up to a limit of 65% or €825,000 of the claim, whichever is the lesser.

The Deputy will also be aware of my decision in principle that the State will ensure that Setanta third party claimants are compensated in full, which was announced on 30 January. The Department of Finance is now working through the detailed arrangements to implement this decision, which is likely to require legislative change.  In this regard, the next step is to give consideration as to whether there is any state aid or other legal issue associated with the proposed approach.  The Department is currently working with the Attorney General’s Office on this issue and once the position is clarified I can give an indication of the likely timeline for payment, including the payment of the additional 35% to those who have settled their claims and have already received compensation of 65% of their claim subject to the limit outlined above.

The liquidator for Setanta Insurance has informed me that as of 31 December 2017, there are 1,577 active claims, of these 573 claimants have been paid compensation from the ICF subject to the 65%/€825,000 limit.

No date has been fixed for the next payment from the ICF, but the Liquidator has informed me that preparatory work is underway in respect of some 275 claims to the value of c €5.8m, with a view to the Accountant to the High Court making an application before the end of March. These  payments will be paid subject to 65%/€825,000 limit. 

It is important to note that only claims which have been settled can be included in applications to the High Court for payment from the ICF. The process of settling claims is still ongoing and is subject in some cases to complex negotiations between all relevant parties. It is hoped that by the State taking steps to ensure that third party claimants are compensated in full, this will encourage the settlement of all outstanding claims as quickly as possible.

World Economic Forum

Ceisteanna (179)

Brendan Howlin

Ceist:

179. Deputy Brendan Howlin asked the Minister for Finance the cost to his Department of attending the World Economic Forum at Davos in 2018; the costs incurred by travel, accommodation, attendance fees and other items; the names of those that attended paid for by his Department; the individual costs attached to each and all other sundry costs; and if he will make a statement on the matter. [9804/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Details of costs incurred to date by my Department for attendance at the World Economic Forum in Davos are set out in the table below. It is not possible to provide a final figure at this stage as a number of outstanding costs have yet to be charged to my Department.

Delegate

Accommodation

Flights

Sundry and Subsistence

Minister Paschal Donohoe, TD

€1,032.39

Government Jet*

€30

Nicholas O’Brien, Assistant Secretary

€211.71

€1,232.06

€282

Michelle O’Connor, Private Secretary

€211.71

€1,232.06

€89.93

Deborah Sweeney, Special Adviser

€211.71

€413.98

€419.27

*As I travelled from Dublin to Zurich (return) on the Government Jet, an administration charge of €20 was incurred on the cancellation of a commercial flight.

Code of Conduct on Mortgage Arrears

Ceisteanna (180)

Michael McGrath

Ceist:

180. Deputy Michael McGrath asked the Minister for Finance if there is a requirement on an unregulated loan owner to set out in writing the reasons for refusing a proposal to restructure a mortgage loan made by the regulated credit servicing firm; and if he will make a statement on the matter. [9839/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am informed by the Central Bank of Ireland that most loan agreements include a clause that allows the original lender to sell the loan on to another firm. The Central Bank has no jurisdiction over unregulated third parties and, consequently, has no power to either impose requirements on or investigate the activities of such unregulated loan owners.  

Regulated credit servicing firms are firms who manage or administer loans on behalf of the unregulated firm and such firms must act in accordance with the requirements of Irish financial services law that applies to ‘regulated financial service providers’, such as the Central Bank’s Code of Conduct on Mortgage Arrears.  Again, however, the requirements of the CCMA only apply to the regulated firm and not the unregulated loan owner. Therefore, an unregulated loan owner is not required by the Central Bank to provide the reasons, in writing, for refusing a proposal to restructure a mortgage loan made by the regulated credit servicing firm.

However, Section 45 of the CCMA states that in relation to regulated firms:

If a lender does not offer a borrower an alternative repayment arrangement, for example, where it is concluded that the mortgage is not sustainable and an alternative repayment arrangement is unlikely to be appropriate, the lender must provide the reasons, on paper or another durable medium, to the borrower. In these circumstances, the lender must inform the borrower of the following:

a) other options available to the borrower, such as voluntary surrender, trading down, mortgage to rent or voluntary sale and the implications of each option for the borrower; and his/her mortgage loan account including:

(i) an estimate of associated costs or charges where known and, where not known, a list of the associated costs or charges;

(ii) the requirement to repay outstanding arrears, if this is the case,

(iii) the anticipated impact on the borrower’s credit rating, and

(iv) the importance of seeking independent advice in relation to these options;

b) the borrower’s right to appeal the decision of the lender not to offer an alternative repayment arrangement to the lender’s Appeals Board;

c) that the borrower is now outside the MARP and that the protections of the MARP no longer apply;

d) that legal proceedings may commence three months from the date the letter is issued or eight months from the date the arrears arose, whichever date is later, and that, irrespective of how the property is repossessed and disposed of, the borrower will remain liable for the outstanding debt, including any accrued interest, charges, legal, selling and other related costs, if this is the case;

e) that the borrower should notify the lender if his/her circumstances improve;

f) the importance of seeking independent legal and/or financial advice;

g) the borrower’s right to consult with a Personal Insolvency Practitioner;

h) the address of any website operated by the Insolvency Service of Ireland which provides information to borrowers on the processes under the Personal Insolvency Act 2012; and

i) that a copy of the most recent standard financial statement completed by the borrower is available on request.

VAT Rate Application

Ceisteanna (181)

Brendan Smith

Ceist:

181. Deputy Brendan Smith asked the Minister for Finance the status of discussions at European Union level to designate defibrillators at a zero rate of VAT; and if he will make a statement on the matter. [9840/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Programme for Partnership Government recognises the difficulties faced by community groups in relation to VAT rates on certain products such as defibrillators. This is an EU competency and the Government has committed to work with our EU counterparts in seeking to reform this area.

Defibrillators, other than implantable defibrillators, are liable to VAT at the standard rate, which in Ireland is 23%. Parts or accessories are also liable to VAT at the standard rate. There is no provision under existing VAT law that would make it possible to apply a reduced rate or zero rate to the supply of such products. Under the EU VAT Directive, Member States may retain the zero rate on goods and services which were in place on 1 January 1991, but cannot extend the zero rate to new goods and services. As such a zero rate cannot be applied to defibrillators. Any changes to VAT rates outside of what is currently permitted by the EU VAT Directive must be negotiated at EU technical working groups and ultimately agreed by the EU Council of Finance Ministers.

As part of the Action Plan on the future of VAT launched on 7 April 2016, which sets out the Commission’s pathway for modernising the VAT system, the EU Commission published its proposal on the structure of VAT rates on January 18, 2018. Technical and political discussions have commenced at EU Council among all Member States and as these discussions progress Ireland will take the opportunity to continue to recommend that Member States should be able to apply specialised VAT rating to defibrillators and other emergency-medical and rescue equipment.

In advance of any change that might be made at EU level to the VAT rating of defibrillators and other products that pose difficulty for community groups, I am happy to draw your attention to the Budget 2018 announcement of a VAT compensation refund scheme, which will compensate charities for the VAT they occur on their inputs, in recognition of the work undertaken by the charities sector.

The scheme will take effect from 1 January 2018 but will be paid one year in arrears. That is, charities may make a claim in 2019 for VAT costs arising in 2018. Charities will be entitled to a proportion of VAT based on the level of non-public funding they receive. A capped fund of €5 million will be available to the scheme in 2019. The Government is committed to supporting community groups and we will continue to press for a reduction in the VAT rate on defibrillators at EU level.

VAT Rate Application

Ceisteanna (182)

Brendan Smith

Ceist:

182. Deputy Brendan Smith asked the Minister for Finance if the feasibility of charity organisations purchasing defibrillators on behalf of various community groups such as the community first responders will be examined in view of the new VAT compensation refund scheme which will compensate charities for the VAT they incur; if this saving can then be passed on to the community first responder network; and if he will make a statement on the matter. [9841/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

In line with my Budget 2018 announcement, a VAT compensation scheme for charities will be introduced in 2019 in respect of VAT expenses incurred in 2018. Charities will be entitled to a refund of a proportion of their VAT costs based on the level of non-public funding they receive, up to a total capped fund of €5m.

Work on the introduction of this scheme has been commenced by officials of my Department and the Office of the Revenue Commissioners. While the high level principles of the scheme were published on my Department’s website on Budget Day, the wider parameters of the operation of the scheme need to be agreed, so that guidelines for charities can be published along with the Ministerial Order underpinning the scheme. Until such time as the wider parameters of the scheme have been fully agreed, and guidelines have been published, it is not possible to comment on the feasibility of the different ways the scheme may potentially express itself.

Financial Institutions Levy

Ceisteanna (183)

Michael McGrath

Ceist:

183. Deputy Michael McGrath asked the Minister for Finance the amount paid by each regulated credit servicing firm to the Central Bank by way of regulatory fees since these firms were first recognised, in tabular form; and if he will make a statement on the matter. [9855/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am informed by the Central Bank of Ireland that due to its obligations to maintain confidentiality, it is not possible to set out the levy rates payable by individual firms in any sector. 

The levy rates payable by firms in the credit servicing sector during the relevant period are set out in the table below provided by the Central Bank. 

Year

Levy   (€)

2015

8,454

2016

18,205

2017

35,067

Financial Institutions Levy

Ceisteanna (184)

Michael McGrath

Ceist:

184. Deputy Michael McGrath asked the Minister for Finance the amount paid by each licensed credit institution to the Central Bank by way of regulatory fees, in each of the years since 2014, in tabular form; and if he will make a statement on the matter. [9856/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am informed by the Central Bank of Ireland that due to its obligations to maintain confidentiality, it is not possible to set out the levy rates payable by individual firms in any sector. However, the basis on which levies payable by credit institutions (in this case referring only to banks, not credit unions) have been calculated in each of the years specified is set out below.

2017 - New Methodology to Calculate Funding Levies for Banks

Following a Consultation Process (CP108 – New Methodology to Calculate Funding Levies), the Central Bank has, in 2017, implemented a new methodology for the calculation of levies payable by credit institutions. This new calculation is similar to that used by the European Central Bank. It takes into account the size and risk of credit institutions, the Central Bank’s role in their supervision within the Single Supervisory Mechanism but also reflects the Central Bank’s consumer protection, anti-money laundering and financial stability mandates. The new methodology eliminates the cliff effects of the previous levy methodology. Banks with the ability to have the greatest impact on financial stability and consumers will continue to be levied in a proportionate manner to the level of supervision undertaken by the Central Bank.

Category A1 entities (comprising sub-categories A1a and A1b )

These entities will fund 80 per cent of the annual funding charge for credit institutions.

- 10 per cent of this amount will be recovered from A1a and A1b credit institutions, split equally amongst them (the minimum levy).

- The remaining 90 per cent (the variable levy) will be allocated between category A1 banks in proportion to their size and importance (as measured by Total Assets) and risk profile (as measured by Total Risk Weighted Exposure Amount).

The above levy calculations will take account of the agreed recovery rates of 100 per cent for the ELG Scheme Institutions (sub-category A1a) and 65 per cent for other credit institutions (sub-category A1b ) resulting in minimum levies in 2017 for A1a credit institutions of €386,458 and A1b credit institutions of €251,198. Individual credit institution levies will then be adjusted for:

(i) external costs related to pre-inquiry work related to the investigation of legacy issues; and

(ii) levies over recovered in 2016.

Category A2 entities

These entities will fund 20 per cent of the annual funding charge for credit institutions before adjustment for

(i) external costs related to pre-inquiry work related to the investigation of legacy issues, and

(ii) levies over recovered in 2016.

- 10 per cent of this amount (the minimum levy - €12,560 in 2017) will be recovered from all category A2 banks, split equally amongst them.

- The remaining 90 per cent (the variable levy) will be allocated between sub-category A2a banks in proportion to their size and importance (as measured by Total Assets) and risk profile (as measured by Total Risk Weighted Exposure Amount).

Individual levy amounts will then be calculated taking account of the agreed recovery rate of 65 per cent, before applying an adjustment in respect of levies over recovered in 2016.

Non-retail EEA branches (sub-category A2b ) will only be subject to the minimum fee component of the above methodology.]

2013 to 2016 - Old Methodology to Calculate Funding Levies for Banks

Between 2013 and 2016 the amount of the Industry Funding Levy payable by a credit institution to the Central Bank was determined by its type and impact categorisation under PRISM[4] . The table below sets out the levy rates applicable during the period requested. It must, of course, be remembered that credit institutions which had previously been admitted to the Credit Institutions (Eligible Liabilities Guarantee) Scheme 2009 and their subsidiaries that are Credit Institutions authorised under Irish legislation were required to fund 100 per cent of the cost of their regulation while other credit institutions were required to fund 50 per cent of the cost of their regulation.

In addition, relevant credit institutions were also required to fully fund the cost of any external reviews of those institutions which were carried out during the period under review.

Credit Institution Type & Year

Ultra High Impact (€)

High Impact (€)

Medium High Impact (€)

Medium Low Impact (€)

Low Impact (€)

Branch/ Freedom of Services (€)

A1a

2014

4,514,457

2,048,435

N/A

N/A

N/A

N/A

2015

7,809,447

3,543,536

N/A

N/A

N/A

N/A

2016

9,979,995

4,528,422

N/A

N/A

N/A

N/A

A1b

2014

N/A

1,117,385

255,490

50,790

21,038

N/A

2015

N/A

1,645,681

376,285

74,804

23,751

N/A

2016

N/A

1,925,477

440,261

87,522

N/A

N/A

A2/A3

2014

N/A

N/A

N/A

N/A

N/A

15,778

2015

N/A

N/A

N/A

N/A

N/A

17,814

2016

N/A

N/A

N/A

N/A

N/A

21,020

A5 (First introduced in 2016)

2016

N/A

N/A

440,261

N/A

N/A

N/A

Single Resolution Fund:

Further to the above, the Central Bank of Ireland, on behalf of the Single Resolution Board (“SRB”), collects contributions from credit institutions (i.e. banks) for the Single Resolution Fund (“SRF”). The SRF was established on 1 January 2016, pursuant to the Single Resolution Mechanism Regulation (EU) No. 806/2016 of the European Parliament and of the Council of 15 July 2014. An institutions annual levy is calculated in accordance with the methodology set out in the Commission Delegated Regulation (EU) 2015/63 of 21 October 2014. The resolution levies that the Central Bank collects from licensed credit institutions do not fall within the remit of a regulatory fee. The purpose of the resolution fund is to facilitate the use of resolution tools, not to pay for the cost of regulation.

Irish credit institutions contributed the following amounts to the SRF:

2016 - €97,138,094

2017 - €95,216,210

Further information on the Central Bank's Annual Industry Funding Levy can be found at: https://www.centralbank.ie/regulation/how-we-regulate/fees-levies/industry-funding-levy/guidance

Vehicle Registration

Ceisteanna (185)

Niamh Smyth

Ceist:

185. Deputy Niamh Smyth asked the Minister for Finance if there is a process to be followed before a vehicle can be confiscated (details supplied); the details of this process; and if he will make a statement on the matter. [9980/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that vehicles, in respect of which certain offences relating to Vehicle Registration Tax (VRT) are committed, are liable to forfeiture and may be seized. The offences in question include evasion of VRT, failure to pay VRT, and being in possession of an unregistered vehicle unless the person concerned is an authorised person or the vehicle has an exemption.

Revenue’s approach to enforcement of the law relating to VRT is that each situation where a failure to comply with the relevant legal requirements is detected is dealt with in a manner that is fair and proportionate in the circumstances of the particular case. In certain instances, a warning will be given or a VRT Demand Notice issued. In other cases, however, such as where it is established that the vehicle has been in the State more than 30 days without being registered, the vehicle would be seized. Revenue may release a vehicle after seizure, in situations, for example, where the detected offence is a first offence and the person concerned agrees to pay a compromise penalty.

If a vehicle is not released following seizure, the person concerned may, if he or she considers that there are grounds for doing so, serve on Revenue, within a month, a notice of claim indicating the reasons why it is considered that the vehicle is not liable to forfeiture.

If a notice of claim is received from the person concerned, Revenue may, if they consider that the vehicle should not be released, take Court proceedings to have it declared to be forfeited.

If a notice of claim is not received from the person concerned, the vehicle is deemed to have been condemned as forfeited.

Vehicle Registration

Ceisteanna (186)

Niamh Smyth

Ceist:

186. Deputy Niamh Smyth asked the Minister for Finance if a vehicle can be taxed as a commercial vehicle (details supplied); if he will request the Revenue Commissioners to examine documentation regarding same; and if he will make a statement on the matter. [9988/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that vehicles classed as ‘EU category N1’ are taxed as commercial vehicles.

Revenue has also confirmed to me that tests undertaken by the National Standards Authority of Ireland (NSAI), which is the relevant competent authority, have determined that vehicles similar to the type presented by the person in question do not meet the necessary criteria to be classed as ‘EU category N1’.

A person who has paid a Vehicle Registration Tax (VRT) charge may appeal the Revenue determination on the classification within two months of the decision date. Information on the VRT appeals process is available at https://www.revenue.ie/en/importing-vehicles-duty-free-allowances/guide-to-vrt/appeals/index.aspx.

Financial Services Regulation

Ceisteanna (187)

Michael McGrath

Ceist:

187. Deputy Michael McGrath asked the Minister for Finance the regulatory differences between a licensed credit institution and other financial institutions, for example, credit servicing firms, debt management firms and retail credit firms; the differences in regulatory powers granted to the Central Bank between licensed credit institutions and other financial institutions, for example, credit servicing firms, debt management firms and retail credit firms; and if he will make a statement on the matter. [9994/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I wish to advise the Deputy that a suite of European legislation underpins the regulation and supervision of licensed credit institutions (licensed under section 9 of the Central Bank Act 1971).

In relation to credit servicing firms, debt management firms and retail credit firms these are all domestic regulatory regimes (without an EU law underpinning).

In all of the above instances the harmonised powers of the Central Bank contained in the Central Bank (Supervision and Enforcement) Act 2013 will be available to the Central Bank depending on the circumstances.

The Central bank codes apply in all cases.