The Government is aware of the pressure that the rising interest rate environment may have on borrowers. I convened a meeting with lenders active in the mortgage market on 31 August of last year. The Central Bank of Ireland, the Insolvency Service of Ireland, the Citizens Information Board and Money Advice and Budgeting Service also attended.
Following this meeting, on 6 September the Banking & Payments Federation of Ireland (BPFI)'s second phase of its Dealing With Debt campaign was launched to highlight new and existing supports available for mortgage customers. One of the initiatives to which I would draw the Deputy's attention is the work between Credit Servicing Firms and MABS on a streamlined customer engagement framework to accelerate the agreement of sustainable repayment plans for customers in financial difficulty.
The consumer protection framework provides the same protections for borrowers regardless of the regulated entity with whom they are dealing, be that a bank, retail credit firm (RCF) or credit servicing firm (CSF). These regulated entities must be authorised and supervised by the Central Bank, and are subject to the full suite of relevant regulatory requirements and financial services legislation, including the Code of Conduct on Mortgage Arrears (CCMA).
There are a broad range of measures in place to protect mortgage holders who are experiencing difficulty with their repayments. The CCMA outlines how a lender must act if a borrower is in or facing mortgage arrears. The CCMA sets out the process that entities must follow when a borrower is experiencing difficulties with their mortgage payments. Due regard must be given to the fact that each case is unique and needs to be considered on its own merits.
Regulated entities must explore all of the options for alternative repayment arrangements (ARAs) in order to determine which ARA, if any, is appropriate and sustainable for a distressed borrower’s individual circumstances. The range of sustainable solutions being offered to consumers has expanded significantly including the use of new ARAs, mortgage-to-rent and personal insolvency arrangements.
The CCMA provides for an appeals mechanism, including where the entity declines to offer an ARA, where the borrower is not willing to enter into the ARA offered or where the entity classifies the borrower as not co-operating. Appeals can ultimately be referred to the Financial Services and Pensions Ombudsman (FSPO).
The CCMA must be complied with under the law and the Central Bank has the power to take enforcement action against any regulated entity which does not act in compliance with the CCMA. The Central Bank continues to supervise compliance with the CCMA and will investigate any issues that arise, including patterns of behaviour which suggest that the CCMA process is not being followed.
Under the CCMA the lender must:
1. Contact the consumer about their mortgage arrears in a timely, clear, and consumer-friendly manner;
2. Get information from the consumer about their financial situation;
3. Assess whether a suitable alternative repayment arrangement can be made; and
4. Resolve the case by offering an alternative repayment arrangement or not.
This CCMA has been designed to protect consumers and regulated lenders are legally obliged to comply with it. The Code requires lenders to:
• Provide dedicated and specially trained staff in their Arrears Support Unit to manage cases. This includes having any meetings with consumers in private and referring them to their online or hardcopy information.
• Follow the Mortgage Arrears Resolution Process (MARP) which sets out how lenders must communicate with consumers, assess their situation with the aim of coming to a resolution. It includes having an appeals process in place so consumers can appeal certain decisions of their lender.
