Wednesday, 13 November 2019

Questions (46)

Joan Burton


46. Deputy Joan Burton asked the Minister for Finance his views on the poor level of consumer protection for mortgagors here; and if he will make a statement on the matter. [46548/19]

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Written answers (Question to Finance)

The consumer protection regulatory framework includes a number of very important measures to protect consumers who are taking out a mortgage, and it seeks to ensure that lenders are transparent and fair in all their dealings with borrowers and that borrowers are protected from the beginning to the end of the mortgage life cycle.

This financial services framework includes protections under the Central Bank Consumer Protection Code 2012, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016, the Consumer Credit Act 1995 and the Central Bank Code of Conduct on Mortgage Arrears.

The Consumer Protection Code provides that a regulated entity must act honestly, fairly and professionally in the best interests of its customers and the integrity of the market, and must make full disclosure of all relevant material information in a way that seeks to inform the customer. It also imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.

The European Union (Consumer Mortgage Credit Agreements) Regulations 2016 transposed the provisions of the Mortgage Credit Directive into Irish law and provide a framework within which all lenders that provide mortgage credit to consumers in the European Union must operate. The Regulations set out further requirements to protect mortgage borrowers, including requirements in respect of provision of standardised information to consumers and the requirement to carry out creditworthiness assessments. Furthermore, the Regulations provide that a lender is not to provide residential mortgage credit to a consumer unless the assessment indicates that the borrower is likely to be in a position to meet his/her obligations in the manner required by the credit agreement.

The Consumer Credit Act 1995 also includes requirements for housing loans, including buy-to-let mortgages. Under the Act, there are provisions in relation to insurance and duties on lenders to supply documentation and information on a mortgage loan.

The Code of Conduct on Mortgage Arrears applies to all regulated mortgage lenders and credit servicing firms operating in the State when dealing with borrowers facing or in mortgage arrears on their primary residence. It provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent way by their lender and that long term resolution is sought by lenders with each of their borrowers.

Overall, therefore, there is a robust consumer protection regulatory framework governing the provision and operation of mortgage agreements.