COVID-19 PQ Responses 17Th April 2020
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COVID-19 PQ Responses 17th April 2020 Prepared by Corporate Affairs, Department of Finance www.gov.ie/finance Topic – Emergency Mortgage Moratorium FIN/COVID/052/20 by Darragh O’Brien T.D. To ask the Minister for Finance to immediately bring 'non-banks' under the emergency mortgage moratorium scheme for the period of the COVID-19 crisis; and if he is willing to make a statement on this matter. FIN/COVID/196/20 by Darragh O’Brien T.D. To ask the Minister for Finance to immediately bring 'non-banks' under the emergency mortgage moratorium scheme for the period of the COVID-19 crisis; and if he is willing to make a statement on this matter. On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important support measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans. The following day, the BPFI confirmed that the main credit servicing firms and non-bank mortgage lenders would also support the Covid-19 related range of measures adopted by the main retail banks. More generally it should also be noted that the Central Bank of Ireland has stated, when dealing with their customers who have been impacted by Covid-19, that it expects all regulated firms, including banks, retail credit and credit servicing firms, to take a consumer-focused approach and to act in their customers’ best interests. Topic – Loans FIN/COVID/241/20 by Frank Feighan T.D. To ask the Department of Finance if he can give a statement in relation to the following personal guarantees aspect of the banks response to COVID19 (details supplied) - Details Supplied: Thanks for taking my call and the updates you are providing, they are a great help. An issue that has popped up over the last few days is Personal Guarantees for business loans. A number of business owners are worried that they may well be exposed if their business goes under due to the Covid 19 shutdown. Also banks are requiring business owners to sigh further Personal Guarantees if they are availing of emergency funds to keep their business going. This could be a very big issue if there is a prolonged shut down and a slow recovery once restrictions are lifted. Thanks for your help with this 1 The issue of personal guarantees in respect of business loans as set out by the Deputy has not been raised with me or officials in the Department to date. I have asked officials to look into this issue and I will revert to the Deputy in the near future Revenue has issued guidance in relation to the circumstances and the manner in which it will amend vehicle benefit-in-kind charges to take account of the impact of the COVID-19 crises. This guidance can be accessed via the below link: https://www.revenue.ie/en/corporate/communications/covid19/compliance-with-certain- reporting-and-filing-obligations.aspx Topic – Benefit in Kind FIN/COVID/244/20 by Frank Feighan T.D. To ask the Minister for Finance in relation to the effect which COVID19 will have on the levels of Benefit in Kind payable on travel costs and company cars due to the reduction in mileage, if the issue is under consideration by his Department and if ways are being identified to address this issue. Revenue has issued guidance in relation to the circumstances and the manner in which it will amend vehicle benefit-in-kind charges to take account of the impact of the COVID-19 crises. This guidance can be accessed via the below link: https://www.revenue.ie/en/corporate/communications/covid19/compliance-with-certain- reporting-and-filing-obligations.aspx Topic – Mortgages and Loans FIN/COVID/284/20 by Paul Murphy T.D. Will the Minister for Finance instruct the banks and all other lending institutions that mortgage and / or loan repayment ‘Covid-19 breaks’ will take the form of extensions to the term of the mortgage or loan; and that repayment remittances foregone during the period of the Covid-19 crisis will not be clawed back in the form of increased repayments over the original term of the mortgage or loan? On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans. The following day, the BPFI confirmed that the main credit servicing firms and non-bank mortgage lenders would also support the Covid-19 related range of measures adopted by the main retail banks. Banking and Payments Federation Ireland (BPFI) has indicated that payment breaks, depending on what best suits an individual borrower’s particular situation, can include:- a ‘full moratorium’ payment break where the full loan repayment amount, including both interest and principal repayment amounts, is postponed for an agreed period of time; 2 an ‘interest only’ payment for an agreed period where only the interest falling due will be paid during the break period and that any principal payments which were also falling due can be deferred; consequently the loan balance will not reduce (or increase) during the break period. However, it will also be essential that lenders fully explain the implications, including any associated cost or other significant impacts, of the particular payment break measures being put in place. For instance, lenders should outline if the repayment term of the mortgage will be extended due to the payment break, if monthly payments will increase following the resumption of the mortgage repayments, if interest will continue to accrue during the payment break and the implications this will have for the total cost of the credit, and any other significant matter for the customer when availing of a Covid-19 payment break, or indeed for any other reason. I understand that the Central Bank of Ireland is liaising with the BPFI in this regard. More generally, it should also be noted that the Central Bank of Ireland has emphasised that the broad provisions of the existing consumer protection framework applies and that, when dealing with their customers who have been impacted by Covid-19, it expects all regulated firms, including banks, retail credit and credit servicing firms, to take a consumer-focused approach and to act in their customers’ best interests. Topic – Mortgages and Loans FIN/COVID/299/20 by Seán Haughey T.D. To ask the Minister for Finance and Public Expenditure and Reform if he is satisfied that the five main banks and the main credit servicing companies are implementing the agreement reached with the Banking and Payments Federation of Ireland in relation to the covid-19 three-month mortgage payment break in a satisfactory and practical way; If these arrangements can be extended to borrowers from the Educational Building Society; and if he will make a statement on the matter. On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks, including AIB and in respect of which EBS is a part, and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the Covid-19 crisis. A number of important measures were outlined for impacted borrowers including payment breaks of up to three months for mortgages and other loans. I am satisfied that the banking sector, including the EBS (see information attached: https://www.ebs.ie/covid19/concerned-about-mortgage-repayments), is now offering flexible arrangements to assist their Covid-19 impacted borrowers. However, if a consumer is not satisfied with a lenders response to a request for a Covid-19 payment break, then the complaints procedure as provided for in the Consumer Protection Code will be available to that borrower. Topic – Mortgages and Loans FIN/COVID/329/20 by Carol Nolan T.D. To ask the Minister for Finance to provide details of his engagement with representatives from the Banking & Payments Federation Ireland from 1 March 2020 to date; if further extensions to the freezing of loan and mortgage repayments were discussed at these meetings and if he will make a statement on the matter. 3 On 18 March last I met with Banking and Payments Federation Ireland (BPFI) and the CEOs of the five main retail banks and following that meeting the banks outlined a coordinated approach to supporting their personal and business customers who have been impacted by the COVID-19 crisis. A number of important measures were outlined by the banks for their impacted borrowers including:- • flexible arrangements, including a payment break for mortgages and other loans. Customers affected by COVID-19 must contact their bank to discuss the flexibility available to them, including the possibility of a payment break of up to 3 months; • support for buy-to-let bank customers with tenants affected by COVID 19. Customers with rental property in which the tenants are adversely impacted by COVID-19 will also be provided with flexibility including with an opportunity to seek a payment break of up to 3 months, which will allow them to exercise due levels of forbearance to their tenants; • extensive supports for SME customers – banks are working to ensure a wide range of credit, cash flow and supply chain supports are offered to businesses who are trying to manage the pressures arising from COVID-19.