Financial Services Regulation.

Dáil Éireann Debate, Tuesday - 6 October 2009

Tuesday, 6 October 2009

Ceisteanna (244, 245, 246)

Paul Kehoe

Ceist:

338 Deputy Paul Kehoe asked the Minister for Finance if, during the period 1992/1993 when mortgage interest rates were increasing rapidly, pressure was put on financial institutions to enter into an agreement to maintain interest rates and increase the length of the mortgage instead; if so, if there is a copy of such an agreement in place; his views on whether this was an appropriate course of action; if his attention has been drawn to the fact that banks, when questioned by customers as to the reason their mortgages have not reached full-term, are then informing of same; and if he will make a statement on the matter. [33812/09]

Paul Kehoe

Ceist:

339 Deputy Paul Kehoe asked the Minister for Finance his views on whether, during the period 1992-1993 when mortgage interest rates were increasing rapidly, when apparently financial institutions maintained interest rates and increased the length of the mortgage instead, this was a fair practise and was it acceptable for the financial institutions to simply place adverts in national newspapers and not write to individual mortgage holders; if a financial institution can change the terms of a mortgage agreement without entering into agreement with their customers; and if he will make a statement on the matter. [33813/09]

Paul Kehoe

Ceist:

340 Deputy Paul Kehoe asked the Minister for Finance his views on whether, during the period 1992/1993 when mortgage interest rates were increasing rapidly, when financial institutions maintained interest rates and increased the length of the mortgage instead, it is fair for the banks to seek additional payments in respect of interest rate increases apparently not passed on to customers in this time of economic hardship in view of the fact that certain institutions have been slow to pass on interest rate reductions at various stages; and if he will make a statement on the matter. [33814/09]

Freagraí scríofa

Minister for Finance (Deputy Brian Lenihan)

I propose to take Questions Nos. 338, 339 and 340 together.

My Department has been informed by the Central Bank which was responsible for the prudential regulation of mortgage lending institutions during the period referred to in the Deputy's questions that it is not aware of any such agreements and in addition no guidance or directions were issued by the Central Bank in relation to this matter at that time.

The Deputy may wish to note that the terms and conditions applying to mortgage agreements can vary from institution to institution including in relation to the manner in which increases in mortgage interest rates are communicated to customers and each customer is bound by the conditions that they sign up to.

In relation to varying the terms of a mortgage agreement, it should be noted that it would be an option available to a financial institution, but only in agreement with its customer, to extend the term of a mortgage should a borrower experiencing financial stress wish to extend the term of the loan to maintain the existing level of monthly repayments.