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Here are the ways that banks are making life hard for vulnerable customers

An inspection by the Central Bank has found that some lending institutions have bypassed legal representation in dealing with clients.

Image: Peter Morrison/AP/Press Association Images

A NEW INSPECTION has found money lenders failing to meet the terms of the Central Bank’s Code of Conduct on Mortgage Arrears (CCMA).

This code is in place to provide protection to consumers by ensuring that lending institutions conduct themselves in the correct manner when seeking repayments and treat borrowers in a “timely, transparent and fair manner”.

As part of the inspection, some lending institutions were found to be not giving borrowers full knowledge of all options available to them; continuing with legal action against borrowers after an alternative repayment arrangements has been agreed; and banks contacting lenders directly after third party legal representation had been nominated to act on their behalf.

Lending institutions, such as banks and building societies, are bound by the CCMA and also the Central Bank’s Consumer Protection Code 2012.


The four key areas looked at by the inspection were:

  • Resolutions of arrears in a timely manner,
  • Transparency of borrower communications, 
  • Fair process, and, 
  • Process improvement and controls. 

In the course of their inspection, the Central Bank looked at seven lending institutions. Although not named, it is thought that they account for around 80% of the Irish mortgage market.

It was found that all of them complied with the CCMA to a certain extend, but that they all also showed signs of “weakness”.

Other notable problems highlighted were that lending institutions were seeking additional ad hoc payments from borrowers on top of their current agreements without assessing the borrower’s ability to make such payments, and the removal of borrowers from the mortgage arrears resolution process for not agreeing to alternative repayment arrangements over the phone.

In a letter sent out to the institutions involved, the Central Bank states that it, “expects lenders to go beyond tick-box compliance and to have a greater focus on delivering fair outcomes for distressed borrowers”.

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The Central Bank has informed institutions that they are required to make changes by the end of November this year.

Other findings 

Despite this criticism it was also found that all of the lending institutions had implemented frameworks under the CCMA and a number of lenders had gone beyond the minimum regulatory requirements.

The Central Bank will be following up on the failings discovered in the inspection, and is considering the use of its regulatory powers which would allow it to take enforced action as a result of the inspection.

Speaking about this, Deputy Governor to the financial institution, Cyril Roux, said, “It is imperative that firms have proper systems and controls in place to ensure that they are delivering appropriate solutions for consumers in a timely, transparent and fair manner.”

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