Opening statement by Wesley Murphy, Head of Consumer Protection Supervision, to the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach

08 May 2024 Speech

Wesley Murphy

Good afternoon, Chair and members of the Committee. Thank you for the invitation to meet the Committee and the opportunity to outline the remit of the Central Bank of Ireland in relation to the issue of defective blocks, including our ongoing engagement with the financial sector and representatives for affected homeowners on this matter.

We know from our engagement with affected homeowners that this is a hugely difficult and stressful experience for them. Through our work we have been focused on ensuring that the financial services sector plays it part in supporting them, in line with our expectations and their obligations to their customers.

The role of the Central Bank

As the Committee is aware, the administration of the Government’s Enhanced Grant Scheme (the Scheme), and matters related to the operation of the Scheme, is a matter for the Department of Housing, Local Government and Heritage. The Central Bank does not have a role in the Scheme’s design or operation. However, the Central Bank has taken steps to ensure that the firms we regulate and their industry bodies engage with the Department to ensure the Scheme can operate properly to achieve its aim.

As we have discussed with the Committee previously, the Central Bank continues to support a coordinated approach involving all relevant bodies and industry sectors. Given the range of stakeholders involved, for the remediation scheme to work and be effective in supporting the homeowners, proper coordination is required. We believe that only through effective engagement and a coordinated approach, under the auspices of the Scheme introduced by the Department of Housing, can the various aspects related to this issue be addressed.

Ongoing engagement

Since the introduction of the Scheme, the Central Bank has been active to ensure that, in their dealings with affected consumers, regulated firms continue to meet regulatory requirements and supervisory expectations. This includes our expectation (which applies in all contexts) that firms regulated by the Central Bank support their customers when faced with challenging circumstances, which includes the hugely challenging situation facing homeowners with defective concrete blocks.

We continue to engage with the Banking and Payments Federation Ireland (BPFI) and Insurance Ireland to ensure the financial services sector plays its proper role in supporting the resolution of the situation for affected homeowners on issues as they relate to the financial sector, and to support the implementation of the government scheme to that end.

To inform our work the Central Bank has also met on a number of occasions, and had ongoing correspondence, with a representative group for affected homeowners. This has been beneficial to our work as we have used the information that homeowners have highlighted to us to engage directly with individual firms on specific issues, in addition to our engagement with the industry representative bodies.

We are aware that the BPFI and Insurance Ireland, on behalf of their member firms, are also engaged directly with homeowner representative groups and a number of measures have been put in place to support affected customers since the introduction of the Scheme. We also note the clarifications provided to the Department by the representative bodies on how the Scheme should work to ensure renovated properties can meet the standard criteria for mortgage and home insurance applications.

The Central Bank will continue to play its part by working closely with all our stakeholders to support affected homeowners and will continue our engagement with the financial services industry and its representative groups to advance this work.

I thank the Committee members for their time and I am happy to take the members’ questions.