As the Deputy will be aware, An Taoiseach, Leo Varadkar T.D. and I, along with the Minister for Business, Enterprise & Innovation, Heather Humphreys T.D., met with the Chief Executives of the five Irish major retail banks earlier this month.
The Taoiseach emphasised the important role of the banking sector in supporting the gradual re-opening of the Irish economy by ensuring a flow of credit to businesses as they begin to trade again, in line with the government’s Roadmap for Re-opening Society and Business.
We welcomed the ongoing work of the banks in helping business customers and mortgage customers impacted by COVID-19, which included the initial three month payment-breaks that allowed households and businesses to defer some of their most significant outgoings. Last month, the members of the Banking and Payments Federation Ireland (BPFI) announced their intention to extend these payment breaks to six months for households and businesses which require it.
The Central Bank is focused on ensuring that extensions to COVID-19 related payment breaks operate in borrowers’ best interests and in line with regulatory requirements. Payment breaks give customers the opportunity to postpone or reduce their repayments on their mortgage, personal or business loans, providing breathing space for borrowers from the severe income shock many households and businesses are experiencing.
The Central Bank has clearly communicated and agreed with the BPFI that it expects that at the end of the agreed payment break that borrowers who can return to full repayments be given, at the minimum, the option to either repay the loan within the remaining term or extend the term of the loan, without penalties noting that borrower circumstances and the appropriateness of each option may differ. These options may result in an increase in monthly repayments due to the overall increase in the cost of credit and this should be fully explained to the borrower. Consumers can also find more information on payment breaks at the Central Bank’s Covid – 19 Hub.