Press Release 6 July 2010
Tá an preasráiteas seo ar fáil as gaeilge chomh maith
-Lenders should move to act immediately before action is taken by Regulator-
Following the publication of the Interim Report of the Expert Group on Mortgage Arrears and Personal Debt today, the Central Bank and Financial Regulator today said that it will act swiftly to address the immediate priorities outlined in the report. Head of Financial Regulation at the Central Bank, Matthew Elderfield, also called on the banks and lenders to take immediate steps to implement the recommendations relevant to them.
The interim report contains a number of recommendations for the Central Bank and Financial Regulator, many of which will be addressed by bringing forward changes to the code of conduct on mortgage arrears including the introduction of an industry wide standard Mortgage Arrears Resolution Process (MARP) and improved communication for mortgage borrowers in arrears. The report also recommends banning penalty interest or arrears charges for borrowers who are taking part in the MARP and for arrears statistics to include the number of rescheduled mortgages.
Head of Financial Regulation, Matthew Elderfield, said "We have participated in this group and are committed to acting swiftly to implement the recommendations of the Group where we are able to do so. We intend to implement the report’s recommendations to provide more help to customers by banning arrears charges, improving lender communication with borrowers and implementing a standard industry-wide mortgage arrears resolution process. I call on lenders to implement now the recommendations to improve the position of those in arrears ahead of formal action by us. I would also like to encourage consumers who feel they are in financial distress to contact their lender at an early stage before an arrears problem gets out of hand. Lenders must treat you fairly. ”
A consultation will be published in August proposing new regulations to address and implement these immediate priorities by amending the statutory code of conduct on mortgage arrears and the Consumer Credit Act. It is intended to publish a revised Code by November 2010. Prior to implementation of these requirements on a statutory footing, firms should move to adopt the measures set out in the report. In order to address the recommendation that lenders should not impose charges on borrowers who are engaging with them, the Financial Regulator will also be engaging with each lender on those charges which are applied under the Consumer Credit Act and previously approved on an institution by institution basis. It will also explore whether legislative change will be necessary to fully implement this recommendation. It is anticipated that the arrears statistics can be amended to reflect rescheduled loans by the end of 2010.
The Central Bank and Financial Regulator will continue to work with the Group and other stakeholders during the next phase of its work to give consideration to broader structural changes to address mortgage arrears and personal debt issues.
View report.