Dáil Éireann Debate, Wednesday - 5 December 2018
157. Deputy Michael McGrath asked the Minister for Finance if the Central Bank has the authority to inspect the methodologies used by licensed credit institutions, retail credit firms or credit servicing firms to calculate mortgage arrears and to commence enforcement proceedings if those methodologies are found to be incorrect; and if he will make a statement on the matter. [51070/18]
Amharc ar fhreagraI have been advised by the Central Bank of Ireland that the Consumer Protection Code 2012 (the Code) and the Code of Conduct on Mortgage Arrears 2013 (the CCMA) do not prescribe a methodology for the calculation of mortgage arrears. However, both the Code and the CCMA set out the information that must be provided to consumers in arrears.
The CCMA sets out how mortgage lenders must treat borrowers in or facing mortgage arrears, and applies to the mortgage loan of a borrower secured by his/her primary residence. Chapter 8 of the Code provides for arrears handling requirements which apply to mortgage loans to which the CCMA does not apply.
In terms of how mortgage arrears are defined in these Codes, the CCMA defines “arrears” as “where a borrower has not made a full mortgage repayment, or only makes a partial mortgage repayment, in accordance with the original mortgage contract, by the schedule due date”. The Code defines "mortgage arrears" as arising where a personal consumer “has not made a full repayment, or only makes a partial repayment, as set out in the original loan account contract, by the scheduled due date”.
The Central Bank has the power to investigate issues to assess compliance with their regulatory requirements and to sanction breaches of financial services law by regulated firms and individuals. As the regulator of financial service providers and markets in Ireland, the Central Bank works to ensure that the best interests of consumers are protected. The Administrative Sanctions Procedure, which is applicable to all regulated financial service providers, is the means by which the Central Bank investigates and sanctions breaches of financial services law by regulated firms. Information detailing this and the full range of enforcement powers available to the Central Bank is available on the Central Bank’s website at https://centralbank.ie/consumer-hub/explainers/what-enforcement-powers-does-the-central-bank-have.
Both I and the Central Bank would encourage all borrowers to engage with their lenders on their mortgage arrears, and if not satisfied with how they are being treated, to make a complaint to their lender, after which they can refer their complaint to the Financial Services and Pensions Ombudsman, who has the statutory remit to consider their individual complaints.
