Dáil Éireann Debate, Friday - 16 September 2016
250. Deputy Michael McGrath asked the Minister for Finance the position in relation to ability of financial institutions to provide credit to a person who is in an insolvency arrangement; if banks have discretion in this matter; if it makes any difference if the person has reached a settlement and is now out of an insolvency arrangement; and if he will make a statement on the matter. [25081/16]
View answerUnder the Personal Insolvency Acts 2012 to 2015, it is an offence for a person who is subject to a Debt Relief Notice ("DRN"), a Debt Settlement Arrangement ("DSA") or a Personal Insolvency Arrangement ("PIA") to seek to obtain credit of more than €650 without informing the creditor that they are a specified debtor. The Act does not prohibit the granting of credit to such persons.
However, the granting of credit to a person in an insolvency arrangement or who has completed one, is a commercial decision for each lender institution concerned. This decision must also safeguard the interests of the borrower and the Deputy will be aware that there are a number of legislative provisions in place to ensure that a lender properly assesses the ability of the borrower to repay the debt.
The person concerned may wish to make a formal complaint regarding this matter to the bank in question and the Central Bank's Consumer Protection Code 2012 sets out timeframes within which a regulated entity must respond to complaints. If a customer has made a formal complaint to the financial service provider in question and is not satisfied with the outcome, I would suggest that they make a complaint to the Financial Services Ombudsman who may investigate a failure or refusal to provide a service. Investigations by the Financial Services Ombudsman are free of charge to the customer.
If the person is a business, the Credit Review Office may be able to assist. The Office helps SME or farm borrowers who have had an application for credit of up to €3 million declined or reduced by the main banks, and who feel that they have a viable business proposition. They also examine cases where borrowers feel that the terms and conditions of their existing loan, or a new loan offer, are unfairly onerous or have been unreasonably changed to their detriment. This is a strictly confidential process between the business, the Credit Review Office and the bank. The Credit Reviewer and his team have overturned more than 50% of the refusals that have been appealed to the Office. Further details are available at www.creditreview.ie.
