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Government’s failure to secure extension of COVID-19 payment breaks from banks has left borrowers vulnerable – Pearse Doherty TD

20 October, 2020 - by Pearse Doherty TD

Sinn Féin spokesperson on Finance Pearse Doherty TD has called on the Government to meet with the five retail banks immediately to secure protections for borrowers impacted by the restrictions announced yesterday evening.

The Donegal TD warned the Government not to repeat the mistakes of last month, when their failure to secure an extension of COVID-19 payment breaks left borrowers vulnerable to default and mortgage arrears.

Teachta Doherty said: 

“The restrictions announced yesterday evening will have an immediate impact on the incomes of households throughout the State. The Tánaiste has estimated that 150,000 workers will lose their jobs.

“Many of these workers are mortgage-holders with repayments to make to the bank. Many of them will not be in a position to make the mortgage payment until they are back at work. They need protection.

"Last month the Government failed to seek an extension for COVID-19 payment breaks for borrowers affected by the pandemic. Worse still, they didn’t even try.

“Instead, they met with the banks, nodded and pedalled a line that the banks would offer solutions to borrowers who have lost income because of public health restrictions.

“Already we have heard from MABS that banks are refusing to offer alternative repayment arrangements to borrowers on the Pandemic Unemployment Payment, despite the empty promises of this Government.

“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 being impaired.

“While borrowers in Germany, Italy, Spain and Portugal were protected by these measures for payment breaks of up to 12 months, Irish borrowers were afforded these protections for only 6 months.

“This was unacceptable and it will have consequences, with thousands of borrowers at risk of falling into default sooner than should have been the case. This is the Government’s failure.

“That isn’t good enough. Thousands of borrowers, including SMEs, face a wave of default and mortgage arrears as a result of public health restrictions and Government inaction.

“The Government must meet with the banks as soon as possible and deliver results for borrowers, not empty words.

“They must deliver an industry-wide payment break for borrowers who lose income as a result of public health restrictions, and ensure that the banks comply.”

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