Sinn Féin spokesperson on Finance Pearse Doherty TD has today written to the Minister for Finance and the CEOs of the five retail banks calling for an extension of payment breaks for borrowers impacted by Covid-19.

Speaking today, the Donegal TD warned that unless these payment breaks are extended before the end of September, tens of thousands of borrowers risk falling into distressed debt in the coming weeks under European Banking Authority rules.

Teachta Doherty said: “This morning I have written to the Minister for Finance and the CEOs of the five retail banks requesting that a further extension is granted to borrowers who have taken Covid-19 payment breaks.

“Figures published this week by the Central Bank show that 74,000 mortgage payment breaks have been granted by the five retail banks since the outbreak of Covid-19.

“Banks and lenders provided a three-month payment break with the option of a further three-month extension without the risk of falling into default under emergency guidelines introduced by the European Banking Authority (EBA) in March.

“The Banking and Payments Federation say that 37,000 of these borrowers are already on the three-month extension with their breaks due to end in the coming weeks.

“With unemployment remaining high and cuts to the Pandemic Unemployment Payment yesterday, many of these households will be unable to resume their mortgage repayments.

“The situation is no less grave for small businesses, many of whom now face further restrictions in the days ahead.

“In short, we are facing a mortgage arrears crisis.

“Unless a further extension to these payment breaks is granted before September 30th, these borrowers will fall into default under the EBA rules if they cannot meet their full capital and interest repayments.

“In Germany, mortgage breaks have been extended until the end of 2020, and for 12 months in Spain and Italy.

“This virus, and its impact on jobs and income, will be with us for some time.

“To avoid an otherwise certain debt crisis, the government and banking sector must now extend payment breaks for Covid-impacted borrowers immediately, without additional interest accruing during the period of the break.”