Paudge Connolly (Cavan-Monaghan, Independent)
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Question 329: To ask the Minister for Finance his plans to regulate the lifetime mortgage sector and equity release schemes under which vulnerable elderly persons are required to draft wills, and executors of elderly persons' estates are required to sign prior contracts of cooperation with banks in the event of the borrowers' deaths; and if he will make a statement on the matter. [10378/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Lifetime Mortgages are regulated under the Consumer Credit Act 1995. In addition, the Financial Regulator has included specific provisions in the Consumer Protection Code relating to Lifetime Mortgages. The Code provides that consumers are fully advised of the consequences of releasing equity from their home and that the financial service provider obtains sufficient information from the client to ensure that a suitable product is provided.

Equity release schemes are not currently a regulated financial service. They involve a part sale of the consumer's property and such transactions are of course subject to the general law in relation to contract and sale of property.

The Consumer Protection Bill 2007 currently before this House will further enhance consumer protection. The Bill provides for the establishment of the National Consumer Agency with an extensive remit including enforcement powers in relation to unfair commercial practices and unfair terms in consumer contracts. The Bill also provides that the functions of the Agency in relation to these matters may be exercised by the Financial Regulator in the case of regulated financial service providers.

In addition to the above my Department together with the Financial Regulator and the Departments of Justice, Equality and Law Reform and the Environment, Heritage and Local Government is undertaking a review to establish whether or not home reversion products and/or their providers should be further regulated.

Participation in equity release products is at the discretion of the consumer. However such participation involves the granting of certain rights in relation to the property which will crystallise on the death of the homeowner. I understand therefore that some providers may insist on the making of a will or on other related formalities. The availability of a will clearly expressing the homeowner's intentions will facilitate the administration of the estate in a speedy and efficient manner to the benefit of all parties involved. Indeed this is generally true whether or not the home owner has availed of equity release or home reversion services.

At the launch on 6 February 2007 of the Financial Regulator's publication entitled "Equity release-using your home to get a cash sum" the Consumer Director issued the following advice to the potential purchasers of equity release products: "ask plenty of questions before you enter into any agreement; discuss the issue with your immediate family before you enter into an agreement; consider alternatives that may be available to you; take independent legal advice." I would recommend that anyone considering one of these products should heed that advice.