Banks Must Re-Introduce Full COVID-19 Payment Breaks
- Irish Banks must re-introduce “blanket” Covid-19 payment breaks, like the first six months of the pandemic, for personal and businesses as permitted under European Banking Authority (EBA) guidance
- Full COVID-19 breaks should be re-introduced for customers if they have previously availed of a break or not
- Borrowers should not have credit rating damaged by the lockdown
With just under one million workers on state income support and thousands more businesses to close due to the latest lockdown, Labour’s Finance spokesperson Ged Nash TD has called on the Government to act urgently and ensure the banks provide for formal mortgage and loan repayment breaks with no interest or penalties in line with European Banking Authority guidelines issued in December.
Deputy Nash said:
“In light of the latest lockdown, banks need to once again commit to blanket Covid-19 mortgage and loan payment breaks for workers who will be laid off or have their incomes hit hard through no fault of their own. CSO figures shows that 40% of the entire workforce is now on the PUP or has their wages paid through the Employment Wage Subsidy Scheme with this figure set to grow in the coming days.
“If the health response now matches what was required last March, so too must the economic response.
“Since the start of December 2020, banks across the EU have been given clearance by the European Banking Authority (EBA) to extend so-called ‘blanket’ loan repayment breaks to customers and businesses, including to mortgage holders, as was the case during the first six months of the pandemic. The EBA guidelines would also allow for workers, families and businesses who hadn’t previously taken up a payment breaks to do so.
“I engaged with the Banking and Payments Federation on this issue in December when they argued that there was no requirement for a general COVID moratorium stage and that the best their member banks would do is to look at each case on a case-by-case basis.
“Workers, families and local businesses cannot afford to wait for ‘case-by-case’ assessment which may also negatively affect their credit rating. They need clarity and certainty, and only a clear re-introduction of a COVID-19 payment break by banks can achieve this.
“I am therefore calling on all banks – including those same banks that were bailed out by Irish public during the last crisis and in which the State still holds a significant stake – to commit to a full re-introduction of the COVID-19 payment breaks and to drop the payment break penalty charges.”
“The Minister for Finance must urgently meet with the Banking and Payments Federation and pillar banks to demand a full implementation of EBA guidelines on payment breaks for Covid-hit loans”.