Tá bainc na tíre seo ag iarraidh na mílte euro de bhreis úis as a gcuid custaiméirí atá ag baint tairbhe as sos íocaíochta mar gheall ar Covid-19. Caithfí deireadh a chur leis seo agus caithfidh an Rialtas seasamh suas i gcoinne na mbanc agus cinntiú a dhéanamh de nach dtarlóidh seo níos mó. On 11 May, the current Tánaiste, the Minister for Finance and the then Minister for Business, Enterprise and Innovation held a meeting with the chief executives of the five main retail banks here, along with Mr. Brian Hayes, chief executive officer of the Banking & Payments Federation Ireland. At the meeting the matter was raised of additional interest being charged arising from mortgage payment breaks.

As the Tánaiste is well aware, on 18 March, the banking sector, along with the Minister for Finance, announced measures in response to Covid-19. Among them was a payment break option that could benefit customers who suffered income loss because of Covid-19. Under this measure, financially vulnerable customers could avail of a break, with no repayments due on either principal or interest for up to six months, with the repayments in question spread over the remainder of the term or the term extended by the length of the payment break.

This will come at a significant cost to the consumer. It is a Covid penalty. It is something I raised in the Dáil on 26 March, more than three months ago, and many times since. All 80,000 customers who have taken this payment break on their mortgages because of Covid-19 will face higher repayments and debts as a result. During the break, interest will continue to accrue and it will be recapitalised thereafter. This will hit some families harder than others.

We can take Permanent TSB as an example, a State-owned bank in which we have a 75% shareholding. Someone with a €250,000 mortgage with 30 years remaining on the term and who takes a six-month break will face an additional cost of more than €6,200. This means the customer will repay all the capital, as per the contract, all the interest and then be hit by a Covid penalty of €6,200. That is an example of a State-owned bank increasing the debt of an already financially vulnerable household.

This matter was raised at the meeting of 11 May, which I know because I have seen the minutes. At the meeting, the chief executive officer of Bank of Ireland claimed the charging of interest during these payment breaks was required by the regulator. The chief executive officer of AIB, in which the State is a majority shareholder, claimed that if interest was not charged, loans would go into default. Neither of these claims is true. No regulator required the banks to charge additional interest on mortgage breaks taken because of Covid-19.

The European Banking Authority, EBA, guidelines published in April indicate it is acceptable for payment breaks to be given without interest being charged. This is what allowed the Spanish Government to adopt legislation in March that would let those impacted by Covid-19 avail of a mortgage payment break on a primary residence without interest accruing. It is what allowed the Belgian Government and banks to adopt measures to ensure no interest would accrue for low-income borrowers availing of a mortgage break. KBC Bank has implemented such a process in Belgium for those customers.

How does the Tánaiste respond to the fact that he and other senior Ministers were misinformed by the retail banks and the Banking & Payments Federation Ireland on 11 May? Most important, what is the Government now going to do? Is it going to act and stop the overcharging of interest on these vulnerable 80,000 customers?

I thank the Deputy for raising this important matter and his ongoing interest and work on behalf of consumers and bank customers. As the Deputy and the rest of the House are aware, banks are offering mortgage holders and businesses loan breaks of between three and six months. This is very welcome as it gives people breathing space if they are struggling to pay their mortgage or business loan as a consequence of the pandemic. So far, 140,000 customers have availed of the payment break. Crucially, the loan is not reclassified as a non-performing loan, which is important for banks as it does not hit their capital and it is important for the customer because it does not affect their credit rating and the mortgage cannot be sold.

It is correct that interest accrues during the break period. The Deputy mentioned the meeting I had, as Taoiseach at the time, with the banking representatives. It was also attended by the Minister for Finance, Deputy Paschal Donohoe, and the banking chief executives. It was on 11 May. I have not seen the minutes but I was at the meeting, whereas the Deputy was not. I know what happened. The banks never claimed they could not waive interest for the period and the representatives said it would be possible for them to waive interest for the period. Their issue was that somebody had to cover the cost of the payment break.

The Deputy knows how this works. Banks might borrow money on the market for ten years and turn that into a ten-year loan or mortgage. If the mortgage is not paid back for 10.5 years or 11 years, there would be an increased cost of borrowing for the banks and the question is who will cover it. Does it come from the bank profits? Ideally, it should do but banks will have no profits this year and may not have profits for a number of years because of what is happening to our economy. Should taxpayers cover the cost? I do not believe so as it would not be fair on taxpayers, many of whom do not even have a mortgage on a home or business. Should this fall to mortgage holders who are up to date with payments? I do not believe so. It must fall somewhere and currently that additional cost is falling on the customers availing of that payment break.

I was very blunt but clear with the bank representatives and I sought assurance from them that as a consequence of them extending these mortgages or loans, they should only be covering their costs. I said to them that it cannot be acceptable for them to get some sort of premium from this or make some sort of additional profit. I am not sure if it is in the meeting minutes but I remember saying to them that if it turns out that banks somehow make additional profit or premium from this, or if they simply make more money than they would have if the loan had been repaid as originally set out, I would see this action being as serious as the tracker mortgage scandal. I told them if that happened we would come down on them like a tonne of bricks.

What I must find out over the next couple of weeks as Tánaiste and Minister with responsibility for business is whether the banks will make any extra money from this in comparison to a position where loans had not been extended. That is a fundamental point.

The minutes are crystal clear. It is not just Bank of Ireland and AIB. This involves Permanent TSB. Unless the minute taker at the meeting has reflected what happened inaccurately - unless it is the polar opposite - there is a serious issue. It is written in black and white in those minutes that Bank of Ireland said this had to be done because the regulator had demanded it. AIB indicated the same and Permanent TSB argued it was the best option because the loans would go into default otherwise and a credit issue would arise for the customer. Unless the minute taker was at a different meeting, there is a serious issue.

More important is the naivety that the Tánaiste has just expressed.

If the Tánaiste goes to Permanent TSB's website he will see it gives an example. If one has a loan of €250,000 for 30 years one will pay back all of the capital, all of the interest that would accrue normally in one's contract but also an additional €6,200. That is the Covid-19 penalty. Is the Tánaiste trying to suggest to me that the delay of payment by six months is costing Permanent TSB €6,200? There is no country in Europe that is faced with higher penalties as a result of this payment break than Ireland because of the high level of interest rates. The Tánaiste should do what the Spanish Government did on this matter. On 30 March it brought in legislation, which I have given to the Minister for Finance, that would prevent the banks profiteering on the back of a pandemic where the economy was shut down and people, unfortunately, are unable to pay their mortgages this time.

I thank the Deputy. We have had a look at what has been done in other countries around Europe and the way the Deputy has presented it in interviews and so on does not tell the full story. Different countries are doing different things but those are broadly in line with what is happening in Ireland. There are some hardship cases, for example, in Belgium which is treating it differently but it is not as the Deputy has presented it in the media. He has been quite misleading in his comments in that regard.

Spain, Germany and Cyprus.

The fundamental point for me, and for customers and people who have availed of a payment break, is whether the banks will make any extra money out of this. If somehow they make extra money out of it by making some sort of Covid premium or Covid bonus for the banks, that is not acceptable and we will deal with that but that is what has to be worked out because that is what matters. It appears to me, and this is what was explained in the meeting, is that if a loan is issued for ten years and it is extended to ten and a half years, 11 years or whatever, there is an additional cost to finance. Somebody has to bear that additional cost to finance and I do not believe it should be the general community, whether it is customers or taxpayers. If it is a case that the banks are making an extra profit out of this or are benefiting from it in some way, that would be a scandal in my view. If that is the way it turns out, we will deal with it.