Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

152. To ask the Minister for Finance how Ireland used the discretion available under the mortgage credit directive; and if he will make a statement on the matter. [14808/16]

Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

153. To ask the Minister for Finance if he is aware of concerns that the mortgage credit directive has increased the difficulty for those who live in the Six Counties from getting a mortgage here and for returned emigrants to acquire a mortgage here because of chapter 9, Article 23 of the directive; and if he will make a statement on the matter. [14809/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 152 and 153 together.

The Mortgage Credit Directive was transposed into Irish law by the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 - SI 142 of 2016 ().

The Member State discretions contained in the Directive were the subject of a public consultation process in Ireland and the submissions received in that process, together with my decision on each of the those discretions, were published on my Department's website in July 2015 (subject to a subsequent adjustment to one decision as also published on the Department's website in March 2016).  The full details on this is attached () and the respective decisions were incorporated, where necessary, into the transposing Regulations.

Having regard to the potential risks for consumer borrowers associated with foreign currency mortgages, the Directive provides for a common minimum regulatory framework to apply to such loans on a European wide basis.  In particular, it provides that, at the time a foreign currency mortgage agreement is concluded, the consumer will have the right to convert the foreign currency loan into an alternative currency or that other arrangements be in place to limit the exchange rate risk to which the consumer is exposed under such a credit agreement.  This is a mandatory requirement of the Directive and the transposing Regulations provide that a creditor shall ensure that at least one of these options is now available to a consumer when taking out a foreign currency mortgage loan. The Directive also gave a discretion to Member States to further regulate foreign currency mortgage loans, but the general view arising from the consultation process was that no further regulation of such loans should be made at this time and, therefore, I decided not to avail of that discretion when transposing Regulations.  However, that will not preclude the adoption of such further regulatory measures on foreign currency mortgages at a future point if considered appropriate, provided that it would be consistent with the provisions of the Mortgage Credit Directive and EU law more generally.

It is accepted that these new provisions will impose some additional regulatory requirements on Irish banks who provide foreign currency mortgage loans, but this will also need to be considered against the additional protections which will now apply to consumers who enter into such agreements.  While it is a commercial matter for individual lenders to decide on the type and nature of credit it wishes to offer to consumers in general or in any individual case, I would nevertheless expect that lenders should be in a position to adjust their systems and practices to take on board evolving legal and regulatory developments in the mortgage area, including those as set out in the Mortgage Credit Directive, which have a primary objective of increasing the protections available to consumer mortgage borrowers.