McGuinness warns of ‘detrimental consequences’ for West Waterford borrowers if Covid payment break is not extended

Sinn Féin Councillor Conor McGuinness has written to the Central Bank to warn that an extension of COVID-19 payment breaks for borrowers is “necessary to avoid serious detrimental consequences for loan and mortgage holders”.

McGuinness raised the issue ahead of Wednesday’s deadline for granting payment breaks that are protected by emergency European guidelines. Sinn Féin finance spokesman Pearse Doherty has repeatedly raised these concerns with the Minister for Finance. 

McGuinness said:

“The ‘paddle your own canoe’ suggestion that borrowers should liaise with their lender to get a break tailored to their own individual circumstances would have detrimental consequences for both the borrower and the banks system wide. 

“A tailored approach would impact negatively on the individual’s credit rating, with their loans still being reclassified as non-performing and falling into default.

“While the Governor of the Central Bank was correct to say that the banks can offer tailored payment breaks to customers, this has always been the case, and is not the issue at hand.

“The emergency guidelines issued by the European Banking Authority in March ensured that COVID-19 payment breaks could be granted without loans falling into default or credit ratings impaired.

“For payment breaks to be covered by these protections, they must be granted by a deadline of 30th September, this Wednesday.

“But Irish borrowers have only been offered 6 month breaks under these protections, while in other European countries they have been offered up to 12 months.

“This means unless an extension of these payment breaks is announced and applied by Wednesday, Irish borrowers will no longer be protected by the European guidelines and could fall into default.

“Minister Paschal Donohoe, as a majority stakeholder in the banking sector, has a responsibility and duty of care to act in the interests of system wide borrowers who are currently in distress over the issue.”