The Central Bank has advised that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic, and my Department maintains close contact with the Central Bank and the BPFI as the lending industry seeks to address the difficulties the COVID-19 situation is causing for both borrowers and lenders.
Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The Banking & Payments Federation Ireland (BPFI) have published a Covid-19 Support FAQ which customers can consult, or customers can contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application.
Within the parameters of the regulatory framework, as set out below, the decision to grant or refuse an individual application for mortgage credit, or temporarily suspend a mortgage approval in principle, is a commercial decision to be made by the regulated entity and it is not possible for me to instruct lenders in that regard.
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. In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower.
