Extra funding allocated to support those in mortgage arrears

Extra funding has been allocated to the State's Money Advice and Budgeting Service (Mabs) to help develop new supports for people in mortgage arrears.

Ita Mangan, chair-designate of the Citizens Information Board, under which Mabs operates, told the Joint Oireachtas Committee on Education and Social Protection that she understood the funding had been approved on Tuesday.

As a result, additional services to help people find solutions to their mortgage arrears problems will be introduced by Mabs offices on a phased basis following consultation with the Citizens Information Board.

Ms Mangan told the committee that this would ensure that borrowers had access to information on the range of supports and options available, advice on the ones most suited to their needs, and assistance in pursuing such options, where necessary.

The development of this new service is among a range of measures to support distressed borrowers announced by the Government last month.

Ms Mangan said: “Many users of Mabs services need the service, not because they have mortgage payment problems, but because of other indebtedness.

“The Mabs service was originally established to try to address the problems caused by moneylenders charging excessive rates of interest.

"It is rather surprising to discover that there are still 360,000 customers of moneylenders in Ireland. This points to the absence of a more appropriate source of credit, such as microloans.

“Recent changes in credit union regulation and amalgamation aimed at curbing reckless lending of high value loans mean that credit unions are not providing the sort of small loans service that is required and which they were originally set up to provide.”

Microloan scheme

Ms Mangan said the Citizens Information Board was in discussions with the Departments of Social Protection and Finance in regard to the establishment of a “microloan” scheme for citizens who have difficulty accessing credit.

“I consider that it is important that this be pursued vigorously. People should be able to access credit that they are able to repay without having to pay excessive charges.”

The committee heard that Mabs provided services to more than 17,000 new clients in 2014 and it has a total active client caseload of more than 20,000.

Committee members also welcomed Ms Mangan’s appointment to the role of chair of the Citizens Information Board.

Funding for the board this year is €46 million.

Of this, some €17.9 million is allocated to the network of Mabs companies, €14.1 million to the board’s regional services, salaries and supports for the information service and phone service, and €3.8 million is allocated to advocacy services.