Dáil Éireann Debate, Wednesday - 5 July 2023
80. Deputy Patrick Costello asked the Minister for Finance the financial measures that are in place for older working people unable to secure a standard bank mortgage due to their age but unable to afford private renting once they retire; and if he will make a statement on the matter. [33033/23]
View answerPolicy on the public supports and measures to assist people, including older working people, with their housing needs, and also in relation to the provision of mortgages by local authorities, are in the first instance a matter for my colleague the Minister for Housing, Local Government and Heritage.
Specifically in relation to the provision of mortgages by Central Bank regulated entities, there are certain legal and regulatory requirements governing the provision of mortgage credit to consumers by such entities, including the Central Bank’s macro-prudential mortgage lending rules and relevant legislation and Central Bank’s regulatory codes.
For example, the Central Bank’s Consumer Protection Code 2012 (the Code) imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess the affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.
A regulated entity must gather and record sufficient information from the consumer prior to offering, recommending, arranging or providing a product or service appropriate to that consumer. The level of information gathered should be appropriate to the nature and complexity of the product or service being sought by the consumer, but must be to a level that allows the regulated entity to provide a professional service.
The information gathered must include details of the consumer’s needs and objectives, personal circumstances and their financial situation including, where relevant income, savings, financial products and other assets as well as debts and financial commitments.
Information on a person’s personal circumstances can include the following where relevant:
• age,
• health,
• knowledge and experience of financial products,
• dependents,
• employment status, and
• known future changes to his/her circumstances.
When assessing the suitability of a product or service for a consumer, the regulated entity must, at a minimum, consider and document whether, on the basis of the information gathered:
• the product or service meets that consumer’s needs and objectives,
• the consumer is likely to be able to meet the financial commitment associated with the product on an ongoing basis and is financially able to bear any risks attaching to the product or service,
• the consumer has the ability to repay the debt in the manner required under the credit agreement, on the basis of the outcome of the assessment of affordability, and
• the product or service is consistent with the consumer’s attitude to risk.
Furthermore, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement.
The CMCAR provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate.
Within this regulatory framework, and it can be noted that there is no specific age restriction on the provision of mortgages in that framework, and subject also to other relevant legal provisions governing the provision of services to individuals, lending policies and individual decisions on the provision of mortgages is a business and commercial matter for lenders.
Neither the Central Bank nor I have a role in such matters. However, if a lender refuses a mortgage application, the CMCAR provides that the lender must inform the consumer without delay of the refusal and the Code states that the lender must clearly outline to the consumer the reasons why the credit was not approved and provide these reasons in writing if requested.
More generally, the Central Bank has advised that it expects that all regulated entities to take a consumer-focused approach in respect of any decision that affects their customers and to communicate clearly, effectively, and in a timely manner with all customers.
If a consumer is not happy with the way a regulated entity is dealing with them, they should in the first instance make a formal complaint to that entity. If a consumer’s complaint is not resolved to their satisfaction through an internal complaints process, they can then seek recourse via the Financial Services and Pensions Ombudsman (FSPO).
The FSPO will take on complaints once the financial services provider's internal complaints process has been exhausted.
Contact details for the FSPO are as follows:
• Address: The Financial Services and Pensions Ombudsman, Lincoln House, Lincoln Place, Dublin 2, D02 VH29;
• Tel: 01-567 7000;
• Email: info@fspo.ie ;
• Website: www.fspo.ie/.
