RegSol Blog

CBI Covid-19 Response

May 2020

A consumer hub on the Central Bank website provides useful information to consumers and regulated entities alike on their response to COVID-19. The Central Bank has been working with financial services providers to help provide breathing space for customers who find themselves in financial difficulties due to these exceptional circumstances.

For example, banks and other financial intermediaries have announced that they will introduce three-month payment breaks on mortgages, and personal and business loans for some business and personal customers affected by COVID-19. All of the existing protections for customers who face actual or potential financial difficulties continue to apply. People who may be experiencing particular vulnerabilities as a result of the impact of COVID-19, for example through illness or loss of income, must be provided with whatever reasonable arrangements and/or assistance they need in dealings with regulated entities. All regulated firms should take a consumer-focused approach and to act in their customers’ best interests.

The Central Bank operates the Central Credit Register, which produces credit reports for lenders and borrowers on request. The Central Bank has clarified to lenders that a payment break agreed between a lender and a borrower as a response to COVID-19 is not, in itself, an event that is reportable to the Central Credit and should not be reported as a “missed payment”. Consistent with this guidance, these payment breaks should not be identified specifically on borrowers’ credit reports. The Central Credit Register does not produce a credit score; it simply records the information that is submitted by lenders on a monthly basis. It is factual, impartial information.

The Central Bank has also set out its expectations of how regulated insurance firms should treat their customers in light of the significant economic disruption caused by the COVID-19 public health emergency. The Central Bank has written to the Chairs and CEOs of both life and general insurance firms requiring them to take account of the challenging situation in which many of their customers find themselves and to put forward consumer-focused solutions for insurance payment breaks, policy rebates and claims in light of the emergency.

The Central Bank has also set out its view that, where a claim can be made because a business has closed as a result of a Government direction due to contagious or infectious disease, the recent Government advice to close a business in the context of COVID-19 should be treated as a direction.

By Judy de Castro - Regulatory Consultant