Dáil Éireann Debate, Wednesday - 16 December 2020
101. Deputy Michael McNamara asked the Minister for Finance his views on whether it is discriminatory for a bank (details supplied) to require a higher deposit level of 25% when purchasing a property in a rural location as opposed to a 10% deposit in non-rural locations; and if he will make a statement on the matter. [43987/20]
Amharc ar fhreagraThe Deputy will be aware that, as Minister for Finance, I cannot mandate or overrule the internal risk assessment processes in any bank, even one in which the State has a shareholding. Decisions in this regard, including credit policies and decisions, are the sole responsibility of the board and management of the banks which must be run on an independent and commercial basis. The independence of banks in which the State has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market. The Relationship Framework for PTSB, the bank referred to by the Deputy, can be found at the following link:
https://www.gov.ie/en/publication/5c6ad6-ptsb-relationship-framework-april-2015/
Notwithstanding this, officials in the Department of Finance contacted the bank for a general comment on how they are managing the matter you have raised and were advised of the following:
“Permanent TSB’s credit policy does not differentiate between rural and urban locations when assessing a customer’s affordability. In relation to Loan To Value requirements for rural apartments/duplex houses, Permanent TSB’s credit policy does not permit lending for apartments/duplex houses in rural areas with a Loan To Value above 75%. This is due to a higher risk of the asset depreciating in value. However, there is no differentiation between Loan To Value requirements for rural and urban houses with the maximum Loan To Value being 90%.”
