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 Header Item NAMA Loan Book (Continued)
 Header Item Code of Conduct on Mortgage Arrears
 Header Item NAMA Legal Issues
 Header Item NAMA Legal Issues
 Header Item NAMA Loan Book
 Header Item Garda Investigations
 Header Item Garda Investigations
 Header Item Banking Sector Issues
 Header Item Tax Yield
 Header Item Departmental Expenditure
 Header Item Tax Collection
 Header Item Money Laundering
 Header Item Tax Collection
 Header Item Banking Sector Regulation

Tuesday, 16 July 2013

Dáil Éireann Debate
Vol. 811 No. 2

First Page Previous Page Page of 133 Next Page Last Page

  Questions Nos. 256 and 257 answered with Question No. 179.

Code of Conduct on Mortgage Arrears

 258. Deputy Andrew Doyle Information on Andrew Doyle Zoom on Andrew Doyle asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the procedure in place where an official of a financial institution does not offer the code of conduct for mortgage arrears from the Central Bank of Ireland to a client who is in mortgage distress; the details of the reprimand and if it is required; and if he will make a statement on the matter.  [34728/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Central Bank’s Code of Conduct on Mortgage Arrears (CCMA) is a statutory Code issued under Section 117 of the Central Bank Act 1989 and lenders are required to comply with the CCMA as a matter of law. The Central Bank has advised me that it has the power to administer sanctions for a contravention of the CCMA under part IIIC of the Central Bank Act 1942.

  The CCMA applies to the mortgage lending activities of all regulated entities, except credit unions, operating in the State, including:

    - A financial services provider authorised, registered or licensed by the Central Bank of Ireland; and

    - A financial services provider authorised, registered or licensed in another EU or EEA Member State and which has provided, or is providing, mortgage lending activities in the State.
  The CCMA applies to the mortgage loan of a borrower which is secured by his/her primary residence.

  Under the CCMA, lenders must apply the protections of the Code to borrowers in the following circumstances:
      i. Borrowers in arrears and in pre-arrears

      ii. In the case of joint borrowers who notify the lender in writing that they have separated or divorced, the lender should treat each borrower as a single borrower under the CCMA (except to the extent that an action requires, as a matter of law, the agreement of both borrowers).
  Chapter 3 of the CCMA deals with the appeals process and provides that a lender must have an appeals process to enable a borrower to appeal in relation to a decision of the lender, including:
    (a) where an alternative repayment arrangement is offered by a lender and the borrower is not willing to enter into the alternative repayment arrangement;

    (b) Where a lender declines to offer an alternative repayment arrangement to a borrower; and

    (c) Where a lender classifies a borrower as not co-operating,
and for this purpose must establish an Appeals Board to consider and determine any such appeals submitted by borrowers.

  Section 50 of the CCMA states that the Appeals Board must be comprised of three of the lender’s senior personnel, who have not been involved in the borrower’s case previously. At least one member of the Appeals Board must be independent of the lender’s management team and must not be involved in lending matters. In addition, the lender must apply Provisions 10.7 and 10.12 of the Central Bank’s Consumer Protection Code 2012 to deal with complaints submitted by borrowers in relation to the lender’s treatment of the borrower’s case under the CCMA, or the lender’s compliance with the requirements of the CCMA.

  Question No. 259 answered with Question No. 230.

NAMA Legal Issues

 260. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if his attention has been drawn to a letter sent on 17 June from the National Asset Management Agency to a number of litigants in a case in New York, where the issue of Anglo Irish Bank overcharging interest on loans is being heard, the contents of which include an implicit threat to the litigants to cease their action or face potential loan foreclosure and receivership; and if he will make a statement on the matter.  [34762/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan In line with long-standing practice, I do not comment on matters which are before the Courts.

NAMA Legal Issues

 261. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if his attention has been drawn to evidence given in a trial currently taking place involving the National Asset Management Agency and a person (details supplied) where it has been alleged that David Drumm in his role in Anglo Irish Bank at the time, agreed to the transfer of interest in a loan that was held in this person's name to other members of their family; if his attention has been drawn to a verbal transfer of loan interest being a practice in Anglo Irish Bank; and if he will make a statement on the matter. [34763/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan It would not be appropriate for me to comment on this matter which is currently before the courts.

NAMA Loan Book

 262. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the number of asset management companies that have been commissioned by the National Asset Management Agency to date; their names; the total value of the assets being managed by these third party companies; the individual and total fees being paid to these third party companies; and his views on NAMA, an asset management company, choosing this policy of commissioning third parties to manage its assets.  [34764/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by NAMA that it has not commissioned any asset management companies. NAMA carries outs its own asset management and debtor management directly and otherwise its loans are serviced by the two participating institutions and, in the case of the former IBRC portfolio, by the Special Liquidators to IBRC.

Garda Investigations

 263. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if his attention has been drawn to the allegations made in a national newspaper on Tuesday, 9, July by the former Irish Life and Permanent chairman (details supplied), where they state they made a statement to the Office of the Director of Corporate Enforcement and the Garda Bureau of Fraud Investigation on the window dressing of Anglo Irish Bank’s end of year books for 2008 but that there has been no follow-up on their affidavit; and in addition that they were informed that the Anglo Irish Bank life deposits were outside the scope of the investigation.  [34765/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I can inform the Deputy that allegations made in a national newspaper by the person whose details were supplied relate to an investigation currently being led by the Garda and it would therefore be inappropriate for me or the Central Bank to provide any information on this matter. The Deputy will be aware that the Terms of Reference for the Nyberg investigation are a matter of public record and are included in the Nyberg report.

Garda Investigations

 264. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if it was a policy of the Central Bank of Ireland in the years leading up to 2008 and following to allow banks to make deposit transfers between themselves to address deficiencies in end of year accounts; if this was an overt policy of the Central Bank of Ireland or if the bank simply toleratesd the policy, as has been alleged.  [34766/13]

 265. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views on the statement made by former Irish Life and Permanent chairman (details supplied) that support provided by Irish Life and Permanent to Anglo Irish Bank arose solely as a result of a request by the Central Bank of Ireland and Financial Regulator, and that the two had requested Irish Life and Permanent to protect the stability of the Irish financial system.  [34767/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I propose to take Questions Nos. 264 and 265 together.

  As the Deputy will be aware the Garda is currently leading an investigation into these matters and it would therefore be inappropriate for me or the Central Bank to provide any information on this matter.

Banking Sector Issues

 266. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will confirm that Anglo Irish Bank sought as a solution to its difficulties on 29 and 30 September 2008 the provision of short-term liquidity support; and if he will explain the reason an alternative to a blanket guarantee, if proposed, was ruled out.  [34780/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised that Anglo Irish Bank would have discussed a number of funding options with the authorities during September 2008. For more detail as to why the ultimate option of a blanket guarantee was adopted, I understand that my predecessor as Minister for Finance gave a detailed account of the lead up to the Government decision to introduce a bank guarantee to the Joint Committee on Finance and the Public Service on 26 February 2009. This transcript is available on the Oireachtas website and the Minister was thanked by Deputies from all parties for the full and frank account he gave to the Committee at that time. http://oireachtasdebates.oireachtas.ie/Debates%20Authoring/DebatesWebPack.nsf/committeetakes/FIJ2009022600003?opendocument.   

In addition, Department of Finance officials gave extensive testimony to the Committee of Public Accounts on 22 July 2010 setting out information prepared during 2008 that related to the Bank Guarantee. The Committee of Public Accounts published documents obtained from the Department of Finance. These documents included a presentation by Anglo Irish Bank to the Department in September 2008. These documents are available at:http://www.oireachtas.ie/viewdoc.asp?fn=/documents/Committees30thDail/PAC/Reports/document1.html.

Tax Yield

 267. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the revenue that could be raised for the Exchequer with the Standard Fund Threshold for pensions reduced to the amount proposed by budget 2013; the income ceiling link for pension tax reliefs reduced to €70,000 per annum, and the tax relief for pension contributions standardised.  [34782/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan In Budget 2013, I announced that changes to the maximum allowable pension fund at retirement for tax purposes (the Standard Fund Threshold - SFT) and other possible changes to give effect to the commitment in the Programme for Government to cap taxpayers’ subsidies for pension schemes which deliver pension income of more than €60,000 will be put in place in 2014. A figure of €250 million was included in the Budget 2013 arithmetic for this measure and was, as clearly stated in the Budget 2013 documentation, a provisional figure pending further detailed analysis of the changes necessary to give effect to the Programme for Government commitment. That analysis is ongoing and involves consideration of changes to the SFT as well as other potential alternative changes relating to the treatment of supplementary pension arrangements.

As regards the proposal to have the income ceiling link for pension tax reliefs reduced to €70,000 per annum, I assume that the Deputy is referring to the current annual earnings cap of €115,000 which operates to limit the level of tax-relieved personal pension contributions in any one year. The annual earnings cap acts, in conjunction with age-related percentage limits of annual earnings, to put a ceiling on the annual amount of tax relief an individual taxpayer can obtain on pension contributions.

A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available by income tax rate, as tax returns by employers to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level. An historical breakdown is available by tax rate of the tax relief claimed on contributions to personal pension plans — Retirement Annuity Contracts (RACs) and Personal Retirement Savings Accounts (PRSAs) — by the self-employed and others, to the extent that the contributions have been included in the personal tax returns of those taxpayers.

There is, therefore, only a limited statistical basis for providing definitive figures. However, by making certain assumptions about the available information, the Revenue Commissioners inform me that the combined estimated full year yield to the Exchequer from reducing the current annual earnings cap of €115,000 to €70,000 and confining tax relief to the standard rate of 20% in respect of individual contributions to occupational pension schemes, RACs and PRSAs would be about €555 million.

Departmental Expenditure

 268. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the amount of fees paid to a person (details supplied) by his Department since vacating the position as Attorney General on 9 March 2011.  [34910/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan My Department has made no payment of fees to the person (details supplied) for the period in question.

Tax Collection

 269. Deputy Brendan Griffin Information on Brendan Griffin Zoom on Brendan Griffin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if it is preferred policy by the Revenue Commissioners to recover tax liabilities to seek judgments on the homes of previously self-employed persons as opposed to accepting settlements or instalment orders; and if he will make a statement on the matter.  [34919/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Firstly, I would like to briefly comment on Revenue’s approach to tax collection and in particular its overall compliance and debt management approach. Revenue has a strong focus on making sure that every individual and business complies with the responsibility to pay the right amount of tax or duty, including any interest and penalties which are due, in full and on time. This is an appropriate and correct focus for Revenue and one that I fully endorse. Delays in the collection of tax revenues properly due adds to the level of Government borrowing and public debt interest and confers an unfair competitive advantage on non-compliant businesses. Revenue also has to guard against so-called “phoenix” businesses where tax debts are left unpaid from a previous business.

Where payment of a tax debt in a single sum is not possible for the taxpayer or business, perhaps due to temporary cashflow difficulties, then Revenue may, and regularly does, agree to a phased payment arrangement. In such circumstances the onus is on the taxpayer or business to make realistic proposals to Revenue that will see the debt being addressed in the shortest possible timescale. A key condition of any such arrangement is that current taxes are paid as they fall due.

I note that in 2012 Revenue granted in excess of 16,000 instalment arrangements covering €124 million of debt to taxpayers experiencing cashflow difficulties. I am very happy that this level of concession clearly confirms Revenue’s commitment to assist viable businesses during our current economic difficulties.

Remedying late or non-compliance is preferably achieved through engagement with the business or taxpayer, but when that engagement is only partially forthcoming, or perhaps not at all, then Revenue has no option but to utilise measures such as the charging and collection of interest or the deployment of effective enforcement measures to secure payment of the tax debt, to encourage future voluntary timely compliance and to ensure a ‘level playing field’ for the vast majority of taxpayers who meet their obligations in full and on time.

In circumstances where Revenue has to use enforcement measures to secure collection of outstanding taxes, the type of enforcement deployed will always depend on the specific circumstances of a case. However, Revenue generally refers such cases to either the Sheriff or Solicitor in the first instance. Where the Solicitor option is deployed, there is the possibility of judgments being secured through the Courts which result in instalment orders, or in judgment mortgages being placed on properties. Revenue has confirmed to me that the use of judgment mortgages is normally to secure a tax debt in the event of a property being sold by the taxpayer. It does not necessarily mean that Revenue intends to "force" sale of the property, and the Deputy may wish to be aware that as a matter of operational policy, Revenue has never forced the sale of a family home.

Money Laundering

 270. Deputy Pat Deering Information on Patrick Deering Zoom on Patrick Deering asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the regulation in place for money being transferred out of the country through over-the-counter media such as Western Union, Moneygram and so on; the controls and checks in place to ensure it is not the reward of illegal activity; the tax rules that apply to this money; and the amount that has been transferred in this way in each of the past three years.  [34929/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Central Bank that all firms involved in money transmission or money remittance are required by it to hold an appropriate authorisation to provide the service. All firms involved in money transmission or money remittance are deemed to be a “designated person” under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (as amended) as they fall within the definition of a “financial institution”. In light of this such firms are required to ensure that they have appropriate procedures and controls in place to prevent and detect money laundering.

  No specific tax rules apply to transfer of money, however in line with the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, a report must be forwarded to the Revenue Commissioners if the transfer of money gives rise to suspicion on the part of the transferor. The Central Bank advises that no data are available with regard to the amounts that are transferred in this way.

Tax Collection

 271. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if capital gains tax is collated in such a way as to be able to determine the revenue that would be raised if capital gains tax was higher on vacant land that has benefited in value from rezoning-planning developments; and what the revenue would be if capital gains tax on those occasions was charged at 50%, 60%, 70% and 80%, respectively.  [34931/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that they do not have data on “vacant land”. I am further advised that the Central Statistics Office and the Minister for the Environment, Community and Local Government do not have data on undeveloped land which would enable a yield from a higher rate of CGT, as proposed, to be estimated.

  Question No. 272 answered with Question No. 221.

Banking Sector Regulation

 273. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if an observer on behalf of the Central Bank or the Department of Finance was ever present at an Anglo Irish Bank board meeting subsequent to the 2008 bank guarantee; if there was a capacity for the presence of such an observer; if so, on what dates the observers were present and on whose behalf; and if the observers ever heard a reference to the existence or content of recorded phone conversations of the bank's employees.  [34944/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Relationship Framework, which was established on 29 March 2012 enabled representatives of the Minister to attend Board meetings in an observer capacity. The representative attended in a passive capacity only and did not play an active role in the meetings. The Board meetings were held monthly and a representative of the Department was usually present. To the best of our knowledge, the content and existence of the tapes was not discussed at the Board meetings following March 2012. I have been advised by the Central Bank that subsequent to the 2008 Guarantee, the Central Bank implemented a more intensive supervisory approach to covered institutions subject to the Credit Institutions (Financial Support) Scheme 2008. This more intensive approach includes attendance at committee and board meetings periodically. The purpose is to observe internal governance in operation, in order to understand the decision making process and also to be aware of individual risks across the covered institutions. The Central Bank does not participate in such meetings and Central Bank officials are not part of the decision making process at those meetings, nor do they otherwise participate in the management of the covered institution. The Central Bank may subsequently follow up items discussed for clarity to raise concerns e.g. how a particular committee operates.

I have been informed by the Central Bank that as Central Bank officials attend board meetings as part of their supervisory responsibilities they are not able (under Section 33AK) to divulge relevant information. Nevertheless they have informed me that they would take action if relevant matters came to their attention through attendance at these meetings.

  Question No. 274 answered with Question No. 223.


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