Brendan Burgess
Founder
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See attached.
I had inadvertently published a draft of the bill a few days ago.
Brendan
Consideration of criteria
2. (1) The Bank shall consider from time to time whether it is necessary to carry out a review of the rate of interest being charged by the covered institutions on standard variable rate mortgages and may issue a direction to a covered institution instructing it to vary the level of interest it charges on standard variable rate mortgages.
(2) The direction referred to in subsection (1) shall only be issued once the Bank hasconsidered—
(a) the current rate which the covered institution impose on standard variable rate mortgages,
(b) any submission from the covered institution outlining the reason for the rate contained in paragraph (a),
(c) the interest rate which has been set by the European Central Bank and any recent changes to the European Central Bank’s interest rate, (d) the profitability of the covered institution,
(e) the viability of the covered institution,
(f) the mortgage exposure of the covered institution,
(g) the impact of the current rate on standard variable mortgage rate holders, and
(h) any other information which is considered relevant for consideration by the Bank.
Direction to covered institutions
3. (1) Having considered the factors outlined in section 2 the Bank may, issue a direction to a covered institution setting out the maximum rate of interest that institution may charge on standard variable rate mortgages.
(2) In circumstances where the Bank, decides to issue a direction pursuant to subsection (1) the Bank must provide the covered institution with a report outlining the reason for the decision to issue such a direction.
(3) Where the Bank decides that no direction will be issued to a covered institution instructing the institution to vary the level of interest charged to standard variable rate mortgages the Bank shall provide a report to the Minister outlining why no action is
being taken.
(4) Any direction issued pursuant to subsection (1) of this section shall lapse after a period of 12 months since the issuing of the direction unless renewed by the Bank.
(5) Notwithstanding the generality of subsection (4) of this section, a covered institution may apply to the Bank to set aside a direction which has been issued pursuant to subsection (1) of this section after a period of 6 months since the issuing of a direction
and if the Bank believes there is merit to such an application having considered the criteria set out in section 2(2) of this Act may agree to set aside the direction.
Reporting requirements
4. (1) The Bank shall report to the Minister annually on the use of the powers provided for under this Act.
(2) The Minister shall have the power to seek interim reports from the Bank on his use or on his failure to use powers under this Act.
Commencement
7. …
(2) This Act shall cease to have effect as and from 31 December 2017.
Interpretation
1. In this Act—
“covered institution” means a credit institution or a subsidiary of a credit institution—
(a) that was specified by order by the Minister under section 6(1) of the Credit
Institutions (Financial Support) Act 2008, and
(b) that had joined the Credit Institutions (Financial Support) Scheme 2008 (S.I. No.
411 of 2008) in accordance with paragraph 5 of the Schedule;
“interest rate” means the variable rate mortgage whereby the interest rate varies to reflect market conditions;
“Minister” means the Minister for Finance;
“mortgage exposure” means the volume of the bank’s distressed residential mortgage book as a proportion of their overall mortgage book; [note that this definition is now redundant and is not used in the revised bill]
“profitability” means the ability of a covered institution to maintain a profit in the market;
“the Bank” means the Central Bank of Ireland;
“viability” means the ability of the covered institution to sustain or maintain growth and development in the market.
I had inadvertently published a draft of the bill a few days ago.
Brendan
Consideration of criteria
2. (1) The Bank shall consider from time to time whether it is necessary to carry out a review of the rate of interest being charged by the covered institutions on standard variable rate mortgages and may issue a direction to a covered institution instructing it to vary the level of interest it charges on standard variable rate mortgages.
(2) The direction referred to in subsection (1) shall only be issued once the Bank hasconsidered—
(a) the current rate which the covered institution impose on standard variable rate mortgages,
(b) any submission from the covered institution outlining the reason for the rate contained in paragraph (a),
(c) the interest rate which has been set by the European Central Bank and any recent changes to the European Central Bank’s interest rate, (d) the profitability of the covered institution,
(e) the viability of the covered institution,
(f) the mortgage exposure of the covered institution,
(g) the impact of the current rate on standard variable mortgage rate holders, and
(h) any other information which is considered relevant for consideration by the Bank.
Direction to covered institutions
3. (1) Having considered the factors outlined in section 2 the Bank may, issue a direction to a covered institution setting out the maximum rate of interest that institution may charge on standard variable rate mortgages.
(2) In circumstances where the Bank, decides to issue a direction pursuant to subsection (1) the Bank must provide the covered institution with a report outlining the reason for the decision to issue such a direction.
(3) Where the Bank decides that no direction will be issued to a covered institution instructing the institution to vary the level of interest charged to standard variable rate mortgages the Bank shall provide a report to the Minister outlining why no action is
being taken.
(4) Any direction issued pursuant to subsection (1) of this section shall lapse after a period of 12 months since the issuing of the direction unless renewed by the Bank.
(5) Notwithstanding the generality of subsection (4) of this section, a covered institution may apply to the Bank to set aside a direction which has been issued pursuant to subsection (1) of this section after a period of 6 months since the issuing of a direction
and if the Bank believes there is merit to such an application having considered the criteria set out in section 2(2) of this Act may agree to set aside the direction.
Reporting requirements
4. (1) The Bank shall report to the Minister annually on the use of the powers provided for under this Act.
(2) The Minister shall have the power to seek interim reports from the Bank on his use or on his failure to use powers under this Act.
Commencement
7. …
(2) This Act shall cease to have effect as and from 31 December 2017.
Interpretation
1. In this Act—
“covered institution” means a credit institution or a subsidiary of a credit institution—
(a) that was specified by order by the Minister under section 6(1) of the Credit
Institutions (Financial Support) Act 2008, and
(b) that had joined the Credit Institutions (Financial Support) Scheme 2008 (S.I. No.
411 of 2008) in accordance with paragraph 5 of the Schedule;
“interest rate” means the variable rate mortgage whereby the interest rate varies to reflect market conditions;
“Minister” means the Minister for Finance;
“mortgage exposure” means the volume of the bank’s distressed residential mortgage book as a proportion of their overall mortgage book; [note that this definition is now redundant and is not used in the revised bill]
“profitability” means the ability of a covered institution to maintain a profit in the market;
“the Bank” means the Central Bank of Ireland;
“viability” means the ability of the covered institution to sustain or maintain growth and development in the market.
Attachments
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