Louise O'Reilly (Dublin Fingal, Sinn Fein)
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91. To ask the Minister for Finance if his attention has been drawn to the fact that a financial institution (details supplied) will not offer six-month payment breaks and moratoriums to persons that drew down a mortgage after 31 March 2020; and if he will make a statement on the matter. [29680/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware as Minister for Finance I have no role in the commercial decisions made by the banks, including the nature and structure of any forbearance measures. This applies equally to the banks in which the State has a shareholding.

EBS has provided me with the following statement:

"The EBA Guidelines on legislative and non-legislative moratoria on loan repayments applied in the light of the COVID-19 crisis, state that “the Covid-19 payment break does not apply to new loans granted after the launch of the moratorium. It has to be ensured that the moratorium addresses a specific issue arising as a result of the COVID-19 pandemic and is not used for new lending granted after the outbreak.”

"If a customer finds themselves in financial difficulty, EBS urges them to make immediate contact, as a range of solutions under our well established forbearance process is available on a case by case basis."

Fergus O'Dowd (Louth, Fine Gael)
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92. To ask the Minister for Finance his views in respect of mortgage applicants of whom Covid-19 review teams within banks are requesting documentation and credit checks from their employers to ascertain if a company is in receipt of the employment wage subsidy scheme in view of the fact that the employee is not in receipt of the payment or has been removed from the scheme; if this is permissible under legislation; and if he will make a statement on the matter. [29710/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Central Bank has advised that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.

Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. If mortgage applicants have any queries or concerns about the impact of COVID-19 on their mortgage application, they should contact their lender directly.

Within the parameters of the regulatory framework, as set out below, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. A loan offer may contain a condition that the lender can withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the offer is a commercial decision for the lender.

Before providing a mortgage, lenders are required to undertake thorough creditworthiness assessments to ensure a borrower will be able to repay the mortgage. This assessment must take into account the individual circumstances of the borrower, including personal circumstances and financial situation.

To expand on the regulatory requirements in this regard, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate.

In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. The Code specifies that the affordability assessment must include consideration of the information gathered on the borrower’s personal circumstances and financial situation.

Where a lender refuses a mortgage application, the CMCAR requires that the lender must inform the consumer without delay of the refusal. In addition, the Code requires that the lender must clearly outline to the consumer the reasons why the credit was not approved, and provide these reasons on paper if requested.

If a mortgage applicant is not satisfied with how 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. If they are still not satisfied with the response from the regulated firm, they can refer the complaint to the Financial Services and Pensions Ombudsman.