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Government's failure to secure Covid-19 payment breaks will have damaging consequences for borrowers - Pearse Doherty TD

28 September, 2020 - by Pearse Doherty TD

Pearse DohertySinn Féin spokesperson on Finance Pearse Doherty TD has criticised the government for failing to secure an extension of payment breaks which are protected from default by emergency European regulations.

Speaking after government ministers met with CEOs of the five retail banks, the Donegal TD said that Irish borrowers had been provided with fewer protections than borrowers in other European jurisdictions.

As a result, Irish borrowers now face falling into default sooner as a result of government inaction.

Teachta Doherty said: “Today, the government has failed to secure protections or Irish borrowers affected by Covid-19 that are in place in many other EU jurisdictions.

“As a result, borrowers and mortgage-holders who have seen their income reduced risk falling into default when they come to the end of their payment breaks.

"The emergency guidelines issued by the European Banking Authority in March ensured that Covid-19 payment breaks could be granted without loans falling into default or credit ratings impaired.

"For payment breaks to be covered by these protections, they had be granted by a deadline of this Wednesday.

“What is clear after today’s meeting is that while borrowers in Germany, Italy, Spain and Portugal are protected by these measures for up to 12 months, Irish borrowers will lose these protections once their six-month payment break end.

“For nearly 40,000 mortgage-holders, this will happen in the coming weeks.

"In July, the Tánaiste and Minister for Enterprise complained that the banks spoke in what he called ‘regulatory gobbledygook’. It is clear that he did not understand this issue then, and he doesn’t understand it now.

“Through government inaction, Irish borrowers are less protected during this crisis than borrowers in other European countries. This government has failed to protect them.”

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