Pearse Doherty TD has criticised the banks for charging additional interest on COVID-19 mortgage breaks, despite not being required to do so.
The Sinn Féin Finance spokesperson said that retails banks “wilfully misinformed” government ministers when they claimed that the regulator required them to charge interest during these payment breaks.
Since the 18th March, nearly 80,000 mortgage-holders impacted by COVID-19 have taken payment breaks. Additional interest charges on the breaks may amount to as much as several thousand euro for borrowers over the lifetime of the loans.
However, the European Banking Authority and Governor of the Central Bank have this week confirmed that banks were not required to charge the extra interest.
Teachta Doherty said: “In a meeting held on May 11th between the five retail banks, the Banking and Payments Federation, the Minister for Finance and then Taoiseach Leo Varadkar, a number of banks claimed that the regulator required them to charge interest during these payment breaks.
“This was not true.
“It is scandalous that the banking sector deliberately misinformed senior Government Ministers regarding a policy choice that will increase the outstanding debt of 80,000 households that have been impacted by the COVID-19 crisis.
“What is more disturbing is that the Minister for Finance was so easily misled by the banks, despite other EU jurisdictions taking action months before to stop the charging of additional interest.
“I have raised this matter with the Government consistently since March, and shared legislation with the Minister for Finance which would prohibit the charging of interest during mortgage payment breaks.
“Despite this, Government and the Minister have failed to act. The result will be additional mortgage debt for tens of thousands of families.”