Thomas Gould
Question:279. Deputy Thomas Gould asked the Minister for Finance if a credit union and or financial institution is allowed to upon granting a new loan add conditions to previous outstanding loans. [43519/21]
View answerWednesday, 15 September 2021
Questions (279, 280)
Thomas Gould
Question:280. Deputy Thomas Gould asked the Minister for Finance if his attention has been drawn to a situation by which credit unions are requiring persons, when taking out a new loan, to waive the guarantee on previous loans due to change in circumstance, for example, a recent cancer diagnosis. [43520/21]
View answerWritten answers
I propose to take Questions Nos. 279 and 280 together.
Credit unions in Ireland are regulated and supervised under the Credit Union Act, 1997 (the 1997 Act) and regulations issued by Central Bank, which set out the framework for the registration, regulation and operation of credit unions.
The Central Bank expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times.
Where a credit union provides a loan between €200 and €75,000, sections 37A and 37B of the Credit Union 1997 Act and the European Communities (Consumer Credit Agreements) Regulations 2010 (the Consumer Credit Regulations) apply.
European Communities (Consumer Credit Agreements) Regulations 2010 (the Consumer Credit Regulations).
Part 4 of the Consumer Credit Regulations addresses information and rights concerning credit agreements (Regulations. 13-21). Regulation 13(1) sets out the information that must be included in credit agreements in scope of the Consumer Credit Regulations. It requires that a credit agreement sets out in a clear and concise manner various information, including contractual terms and conditions.
The ability to amend conditions of existing loans, for example, waiving a guarantee on a loan, would be governed by the terms and conditions of the existing loan.
Credit Union Act 1997
Credit unions must also comply with the Credit Union Act, 1997 (the 1997 Act). Sections 35 to 38 of the 1997 Act are the relevant sections on credit union loans.
Section 35(2) of the 1997 Act states:
“A credit union may make a loan to a member for such purpose as the credit union considers appropriate, upon such security (or without security) and terms as the rules of the credit union may provide. The ability of the loan applicant to repay shall be the primary consideration in the underwriting process of the credit union”.
The Registry of Credit Unions has developed a Credit Union Handbook the purpose of which is to assist credit unions by bringing together in one place a number of legal and regulatory requirements and guidance that apply to credit unions. The Credit Union Handbook, including the Lending and Consumer Protection chapters, is publicly available on the Central Bank’s website. Information is also available on the Consumer Protection section of the Central Bank’s website.
Complaints
If a consumer is not satisfied with how a regulated firm is dealing with them, or they believe that the regulated firm is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated firm. If they are not happy with the response they receive, they can refer their complaint to the Financial Services and Pensions Ombudsman (FSPO) where the complaint comes within the jurisdiction of the FSPO.
Question No. 280 answered with Question No. 279.