Financial Services Dail Éireann — 2020-11-25 ============================================================ Bernard Durkan (FG), Kildare North I thank the Ceann Comhairle for affording me the opportunity to raise this important issue. It relates to a friend of a constituent who, along with the partner and family, borrowed money during the boom times. It was not wise borrowing. The Ceann Comhairle or I would not have approved or authorised it but many things happened during the boom that we would not have authorised. In any event, the family suffered a number of bereavements, which substantially altered the ability to repay and serious issues were arising. A partial solution was found in 2018 where part of the properties were sold to liquidate some of the debt and, as the Ceann Comhairle and I know, the worst possible solution is a partial solution; it has to be all or nothing. We now have a situation whereby the current lender proposes to secure the rest of the property and make the person homeless. I intervened some weeks ago explaining the reason I wanted a delay in the process until some dialogue could be entered into and an arrangement agreed within the capabilities of the borrower to meet and for the bank to accept. Very little followed from that until, in the past week or so, the remaining borrower received notice to the effect that it looked as if the intention was to seek liquidation or receivership. I corresponded once again on 18 November to the effect that I was anxious to obtain an urgent response in order to engage with some entity which could speak with authority. I did not receive a reply until I sent a further letter and email in the past 24 hours to state that I proposed to raise the case in the House at the earliest opportunity, that I had already raised it in the finance committee and had invoked the Central Bank to respond and get involved in dealing with that kind of situation in a way that gives some recognition to the plight of the borrower when she is doing her best or cannot do any better than she is doing. To be fair, I then received a response from the solicitor acting for the companies who said there was no longer any need to raise it in the House because they recognised there was a possibility of some discussion taking place but that they would not defer further action because they only received my letter on the day after they had authorised the legal action. That is immaterial because the client can always instruct her legal representatives to go ahead or stop as the case may be. I am particularly grateful for the opportunity to raise this issue in the House. I believe that it is possible to make a meaningful contribution provided that the lending institution involved is prepared to recognise that it has a role to play also and that there are human issues in this type of case that should be recognised. I hope that as and from today we will have a situation whereby I can enter into dialogue on behalf of the borrower, which hopefully will be of benefit to that borrower. Ossian Smyth (GP), Dún Laoghaire I thank Deputy Durkan for raising the matter. In the first instance I wish to express my sincere condolences to the borrower on her recent bereavements. In this case I assume the Deputy is referring to a borrower whose mortgage is held by the entity to which he referred in the details supplied. This entity in question is authorised on a transitional basis on the Central Bank's register of credit servicing firms. This provides for entities to be authorised until the Central Bank has granted or refused their authorisation as long as they were carrying on the activity of a credit servicing firm before the requirement to be authorised. While under consideration for full authorisation, the loan owners nevertheless still have to comply with a suite of consumer protection and other regulatory requirements, including the Central Bank's statutory codes, and therefore the consumer protections which applied when the loan was initially made continue to apply fully following the purchase of a loan by the new creditor, which I will detail now. The code of conduct on mortgage arrears, the CCMA, in particular provides a strong consumer protection framework for borrowers who are in arrears or pre-arrears on a mortgage loan secured on a primary residence. The overriding objective of the CCMA is to ensure the fair and transparent treatment of consumers in mortgage arrears or pre-arrears and that due regard is had to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits. The CCMA recognises that it is in the interests of borrowers and regulated firms to address financial difficulties as speedily, effectively and sympathetically as circumstances allow. It also sets out the mortgage arrears resolution process, MARP, which is a four-step process that regulated entities must follow. The key step in this MARP is the resolution of a particular mortgage difficulty. In this regard, the CCMA requires, in respect of a co-operating borrower, regulated entities to explore all of the options for an alternative repayment arrangement, ARA, offered by that lender. Furthermore, the regulated entity is required to document its considerations of each option examined, including the reasons the option or options offered are appropriate and sustainable in the individual circumstances of the case and also the reason options considered and not offered are not appropriate and not considered to be sustainable for the borrower's individual circumstances. Where a regulated entity does not offer an ARA it must, among a range of requirements, set out on paper or another durable medium the reasons for that decision to the borrower, inform the borrower of the other options available to him or her, such as a voluntary sale or mortgage to rent, and inform the borrower of his or her right to appeal the decision under the CCMA to the lenders appeal board and also the right to consult a personal insolvency practitioner. In addition, following an internal CCMA appeals process, the regulated entity will also be required to inform the borrower of her right to refer the matter to the statutory Financial Services and Pensions Ombudsman of Ireland. It is also necessary for the lender to engage in real, effective and proportionate communication with the borrower. In this regard, it should be noted that provision 8 of the CCMA provides that at the borrower's request and with the borrower's written consent the lender must liaise with a third party nominated by the borrower to act on her behalf in relation to her arrears situation. That is an important provision but it is also a very clear rule, which is at the heart of the Deputy's question. The lender must liaise with a third party nominated by the borrower. For example, for borrowers relying on the help of the Money Advice and Budgeting Service, MABS, the lender must engage with that service. However, the provision does not prevent the lender from contacting the borrower directly regarding other matters or issuing communications required under the code directly to the borrower. Furthermore, under provision 22, a lender must ensure that the level of communications is proportionate, that communications are not aggressive, intimidating or harassing and that borrowers are given sufficient time to complete required actions. I hope this will offer assistance to the Deputy in his engagement with the constituent who is experiencing mortgage difficulty. Bernard Durkan (FG), Kildare North I thank the Minister of State for his comprehensive reply, which is greatly appreciated. I agree it will be of benefit in pursuing the issue once again with the current lenders. The one fault that I and many other Members in this House have raised regarding such issues is that the MARP that is available is something the lenders draw up and immediately tell the borrower and those acting on their behalf that they do not qualify and cannot get the benefit, that the borrower has a distressed loan and that the lender believes he or she does not have the ability to discharge it. That does not mean that it is impossible to resolve it. There is almost €170,000 in interest in this particular situation, which is a considerable amount of money, particularly when part of the loan is covered by a very low interest tracker mortgage. There are many issues to be discussed in regard to this case and it should be possible to bring about a satisfactory resolution. The most important thing is that Deputies have access to the Ceann Comhairle to raise these issues and to the Central Bank via the relevant committees of the House to be assured that what is happening is in accordance with the legislation, due process and best practice. I thank the Minister of State for his reply and the Ceann Comhairle for facilitating me in raising the issue. Ossian Smyth (GP), Dún Laoghaire As I mentioned, there is a strong consumer protection framework in place to protect mortgage and other loan borrowers. Borrowers have a suite of protections and lenders have a range of responsibilities to discharge when dealing with borrowers in arrears. There are also a number of public supports available to borrowers in debt difficulty, such as MABS and the Abhaile service for mortgage debt. I encourage any borrower who is experiencing difficulty to engage with these services. If a borrower is in significant difficulty, the Deputy may also wish to note that there is also scope for a personal insolvency practitioner, PIP, to be appointed by a borrower to assist him or her in reaching a satisfactory outcome with the lender. Where a PIP is appointed, the PIP may make a proposal to the borrower's creditors, and even where that proposal is rejected by the creditors, there is the ability, if the arrangement includes a loan which is secured on a principal private residence, for it to be adopted by the courts. As the Deputy will know, the Minister for Justice is currently bringing forward legislation to extend the circumstances in which this option is available to borrowers. Much has been done over the last years to enhance protections for borrowers and I assure the Deputy that the Minister for Finance will continue to work with the Central Bank, as regulator, to ensure that the full suite of consumer protection measures is available to borrowers and that lenders who do not meet their requirements are dealt with appropriately under the supervisory framework for regulated financial service providers. --- Source: Houses of the Oireachtas. Licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). The Official Report is revised after first publication; the fetch timestamp below identifies the version quoted. Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/dail/2020-11-25/debate/main Retrieved: 2026-08-14T04:48:50+00:00 Sitting date: 2020-11-25