Michael Fitzmaurice (Roscommon-Galway, Independent)
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134. To ask the Minister for Finance the way in which the national resolution fund will be financed in accordance with EU Regulation 713/2020; and if he will make a statement on the matter. [28923/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I assume the Deputy is referring to Statutory Instrument 713/2020: "European Union (Bank Recovery and Resolution) (Amendment) Regulations 2020" which amends SI 289/2015: "European Union (Bank Recovery and Resolution) Regulations 2015".

The Bank and Investment Fund Resolution Fund (BIFR) was set up under the 2015 Regulations and is administered by the Central Bank of Ireland.

There were no amendments to the financing arrangements for the BIFR contained within SI 713/2020, accordingly, there is no change to the manner in which the BIFR is financed.

The BIFR was established in November 2015 in accordance with Regulation 163 of the 2015 Regulations. In resolution actions the BIFR may, subject to conditionality, be used to:

- Guarantee the assets or the liabilities of an institution under resolution

- Make loans to or to purchase assets of an institution under resolution

- Make contributions to a bridge institution and an asset management vehicle

- Make a contribution to an institution under resolution in lieu of the write-down or conversion of liabilities of certain creditors under specific conditions

- Pay compensation to shareholders or creditors who incurred greater losses in resolution than under normal insolvency proceedings.

The financing sources for the BIFR are established under Regulations 166-168 of the 2015 Regulations. Credit Institutions, Irish-authorised branches of credit institutions authorised in a non-European Economic Area territory and investment firms which are in the scope of the BRRD must contribute to the BIFR.

Credit institutions and investment firms which are covered by the European Single Resolution Mechanism do not contribute to the BIFR, and instead contribute to the European Single Resolution Fund.

Peadar Tóibín (Meath West, Aontú)
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135. To ask the Minister for Finance the mechanisms in place to allow persons who are mortgage approved to draw down finances in circumstances in which they are being prohibited from doing so in cases in which their employer is availing of the employment wage subsidy scheme. [28935/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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Since the COVID-19 situation first arose, I have maintained contact with the BPFI and lenders on the measures they have put in place to assist their customers who are economically impacted by the pandemic. In relation to the particular issue of new mortgage lending, the main retail banks previously confirmed that they are considering mortgage applications and mortgage drawdowns in relation to their customers who were on the Employment Wage Subsidy Scheme on a case by case basis and that they are taking a fair and balanced approach. Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. Therefore, if mortgage applicants have any queries or concerns about the impact of COVID-19 on their mortgage application, they should in the first instance contact their lender directly on the matter.

However, there are certain consumer protection requirements which govern the provision of mortgage credit. For example, 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 with a view to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR further 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 are 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. Furthermore, 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.

Within this regulatory framework, the decision to grant or refuse an application for mortgage credit remains a commercial matter for the individual lender. Also a loan offer may contain a condition that would allow the lender to 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 also a commercial and contractual decision for the lender.

Nevertheless, the Central Bank has indicated 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. If a mortgage applicant is not satisfied with how a regulated firm is dealing with them in relation to an application for credit or the drawn down of credit, 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 the mortgage applicant is still not satisfied with the response from the regulated firm, he or she can refer the complaint to the statutory Financial Services and Pensions Ombudsman.