Dáil Éireann Debate, Wednesday - 5 October 2022
104. Deputy Steven Matthews asked the Minister for Finance if his attention has been drawn to a report published by an organisation (details supplied); if he has considered the recommendations made in the report in relation to the provision of mortgages and other financial products to cancer survivors; and if he will make a statement on the matter. [48708/22]
Amharc ar fhreagraI note the report referred to by the Deputy.
In relation to mortgage lending, there are a number of legal and regulatory requirements governing the provision of mortgage credit to consumers. These are primarily designed to ensure that such credit is suitable and affordable for the consumer.
For example, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 requires lenders to make a thorough assessment of the consumer's creditworthiness and that such an assessment shall take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under such a credit agreement. The Central Bank's Consumer Protection Code also provides that regulated mortgage lenders should gather relevant sufficient information from a consumer, such as the consumer's needs and objectives, personal circumstances, financial situation prior to offering a product or service to a consumer including a mortgage.
There are also other related requirements associated with the provision of a mortgage such as that contained in section 126 of the Consumer Credit Act 1995 which provides that mortgage lenders must ensure that a mortgage applicant has a life assurance policy in place before granting a mortgage loan.
This is an important statutory provision which is designed to protect the borrower's dependants and their home should the borrower die before the mortgage has been repaid. However, the Act also recognises that in certain cases such a protection is not necessary or would not be appropriate and it provides for a number of limited exemptions to this statutory obligation. These exceptions are:
- where the house in respect of which the loan is made is, in the mortgage lender's opinion, not intended for use as the principal residence of the borrower or of his/her dependants;
- loans to persons who belong to a class of persons which would not be acceptable to an insurer, or which would only be acceptable to an insurer at a premium significantly higher than that payable by borrowers generally;
- loans to persons who are over 50 years of age at the time the loan is approved;
- loans to persons who, at the time the loan is made, have otherwise arranged life assurance, providing for payment of a sum, in the event of death, that will at least cover the outstanding balance on the mortgage.
However, it should also be noted that, as a contractual matter outside of the above statutory framework, mortgage lenders could still require that a life assurance policy is put in place as a condition for a mortgage. In such circumstances that would be a business and commercial matter for the individual lender.
If an applicant for a mortgage or another financial product, such as life assurance, is not satisfied with the way a regulated firm is dealing with them, or they believe that the regulated firm is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated firm.
Furthermore, if the person is not satisfied with the response from the regulated entity to that complaint, s/he may then submit the matter to the statutory and independent Financial Services and Pensions Ombudsman.
More generally in the area of consumer protection, the Deputy may wish to note that the Central Bank has just launched a review of the Consumer Protection Code and has issued a Discussion Paper to assist this process. The Central Bank has indicated that the primary purpose of the Discussion Paper is to facilitate an engagement by the Central Bank with a range of interested parties, to enhance broader understanding of the role and work of the Central Bank in terms of consumer protection and to inform the Central Bank as it commences its work on its review of the Consumer Protection Code.
