Oireachtas Joint and Select Committees

Thursday, 19 October 2017

Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach

Engagement with the Central Bank of Ireland

9:30 am

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

It is in relation to mortgage pricing. What are the views of the Central Bank on prohibiting any discrimination by lenders between new and existing customers? The Governor may say it does not apply any more and, to be fair to most lenders it does not, but there are cases where different treatment still occurs. If we take, for example, Permanent TSB's existing customers, when it comes to a fixed rate offering the lowest offer they will receive is 4.2%, irrespective of their loan to value ratio. New customers can get a rate as low as 3.2%. This is one example of clear discrimination between new and existing customers.

The Competition and Consumer Protection Commission did a paper on mortgage options and looked at the issue of cashback offers in the mortgage market. It made the point these offers and their marketing are potentially exploitative of consumer biases and may result in consumers making decisions for short-term gains that over the medium or long term are not in their best interests. It has recommended that a joint working group examine the issue further. The focus groups that have been done have found that many consumers are confused and unable to really assess what is in their best long-term interests. What is the Central Bank's view of prohibiting these cashback offers?

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