Government must force banks to provide payment break extension without additional interest for COVID-impacted borrowers – Matt Carthy TD
Cavan Monaghan Sinn Féin TD, Matt Carthy, has joined calls to the government to force lenders to provide payment break extensions without additional interest for borrowers impacted by the latest round of COVID-19 restrictions.
On December 2nd the European regulator announced that it was reactivating its guidelines for COVID-19 payment breaks in response to the second wave of the virus. This allows the Government and Irish banks to provide for a 3-month extension to payment breaks for those borrowers that needed it during the second and third waves of the virus.
Speaking this week, Teachta Carthy said:
“The third surge of the Coronavirus poses a grave threat to the health and security of our society.
“Just like previous waves, this latest surge has resulted in job losses, continued unemployment or financial insecurity for many mortgage borrowers and businesses.
“When this pandemic began, the European Banking Authority issued guidelines that allowed Government and lenders to provide for payment breaks for borrowers who were impacted by the virus.
“Due to Government inaction, Irish borrowers were only able to avail of 6-month payment breaks while borrowers in Germany, Italy and Spain were able to avail of breaks of between 9 and 12 months.
“Worse still, these banks charged borrowers additional interest during their payment breaks, increasing their outstanding debt by thousands of euros. By the end of November, over 9,000 mortgage holders and SMEs whose payment breaks had ended were unable to return to normal repayments.
“We know that banks and lenders have failed to offer many of these borrowers sustainable solutions in these difficult times.
“On December 2nd the EBA announced that it was reactivating its payment break guidelines. This was an opportunity to provide real relief for thousands of borrowers who have now faced two rounds of restrictions since November.
“Despite calls from Sinn Féin’s Finance Spokesperson, Pearse Doherty, for the Government and banks to seize this opportunity, they failed to do so.
“As we face another prolonged period of public health restrictions, we are again calling on the Government to do the right thing and secure a payment break extension without additional interest for those borrowers who need it.”