Focused on protecting consumers and supporting individuals and firms in financial difficulty - Central Bank of Ireland

• No impediment to banks introducing 3-month Covid-19 payment breaks
• Consumer protection framework will ensure consumer interests protected
• Resilience of the system in the short, medium and long term needs to be ensured so it can serve consumers and the wider economy

Recent decisions by the Central Bank, also as part of the Eurosystem and Single Supervisory Mechanisms, are designed to ensure monetary and financial stability and that the financial system operates in the best interests of consumers and the wider economy. These include wide ranging measures such as the launch of a €750bn Pandemic Emergency Purchase Programme yesterday, temporary capital and operational relief to banks across the Eurozone, and the release the Counter Cyclical Capital Buffer (CCyB) from 1% to 0%.

In order to ensure that the benefit of these measures are passed on to households and businesses, the Central Bank today met with the Banking & Payments Federation Ireland (BPFI) and five retail banks¹ to discuss these and other issues. During this constructive meeting, both the Central Bank and the BPFI agreed that there is no impediment to the banks introducing a 3-month Covid-19 payment break for those affected by the pandemic.

Speaking following today’s meeting, Governor of the Central Bank of Ireland, Gabriel Makhlouf, said: “Our role is to protect and maintain financial stability now and into the future. We need to make sure that the financial system works well for everyone, and that consumers are protected, particularly those who may experience financial difficulties at this time.

“We are working constructively with all the sectors we regulate, recognising the challenges they face to maintain continuity of business and provision of service to customers. We will also maintain appropriate regulatory oversight throughout this period. The resilience of banks has been built up over the last decade. We want to ensure they remain resilient through this challenging environment in order to safeguard the financial system in the public interest.”

The Central Bank also emphasised the provisions of the existing consumer protection framework, which is designed to ensure that consumers’ best interests are protected, particularly in times of financial difficulties. People who may be experiencing particular vulnerabilities as a result of the impact of COVID-19, for example, illness or loss of income, must be provided with whatever reasonable arrangements and/or assistance may be necessary in dealings with regulated entities.

Payment moratoria

Banks will introduce three-month payment moratoria on mortgages, and personal and business loans for some business and personal customers affected by COVID-19. The Central Bank understand all BPFI members including non-banks will introduce this measure for affected customers. The Central Bank 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. Any customer facing potential difficulties in making loan repayments as a result of COVID-19, is advised to contact their bank or credit servicer as early as possible. All of the existing protections for customers who face actual or potential financial difficulties continue to apply.

Central Credit Register

The Central Credit Register produces credit reports for lenders and borrowers on request. The Central Credit Register does not produce a credit score; it simply records the information that is submitted by lenders on a monthly basis.

The Central Bank and lenders are working to develop practical measures so that the credit record of those who avail of a payment break get an appropriate recording on the Central Credit Register.

¹ CEO BNP Paribas was also in attendance, representing the international bank members of BPFI.

Notes

Read the Statement by Governor Makhlouf

European Central Bank: ECB announces €750 billion Pandemic Emergency Purchase Programme (PEPP) (18 March 2020)

Single Supervisory Mechanism: ECB Banking Supervision provides temporary capital and operational relief in reaction to coronavirus

Further information on the Central Credit Register