Rose Conway-Walsh (Mayo, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

145. To ask the Minister for Finance if his attention has been drawn to the fact that persons with eating disorders are currently unable to get a mortgage due to the fact that they are being turned down for life insurance, a requirement of all mortgage applications; the steps he is taking to address the issue; and if he will make a statement on the matter. [54313/21]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

When a person applies for a mortgage loan to buy a home, the person will generally be required to take out mortgage protection insurance. In most cases, a lender is legally required under section 126 of the Consumer Credit Act 1995 to make sure that a mortgage applicant has mortgage protection insurance in place before granting a mortgage loan. This is an important statutory provision which is designed to protect the borrower's dependants and their home should the borrower die before the mortgage has been repaid.

However, the Act also recognises that in certain cases, as a statutory measure, such protection is not necessary or would be inappropriate and it provides for a number of limited exemptions to this statutory obligation such as where the borrower belongs to a class of persons which would not be acceptable to a life insurer, or would only be acceptable to an insurer at a premium significantly higher than that payable by borrowers generally. In such circumstances, there is no statutory requirement on a mortgage lender to arrange for mortgage protection insurance. Nevertheless, it may also be the case that, in circumstances where there is no specific statutory obligation on a mortgage lender to arrange for mortgage protection insurance in association with a housing loan, an individual mortgage lender may, as a matter of its own commercial policy, still require a mortgage borrower to put in place such an insurance policy as a condition for obtaining mortgage credit. That would be a commercial decision as opposed to a statutory requirement for an individual mortgage lender and it is not possible for me to instruct lenders on their commercial lending policies or their commercial decisions on any individual mortgage application, including the insurance and other security they require either in respect of the borrower or the secured property in relation to a mortgage loan. While I cannot involve myself in the commercial decisions lenders may make in respect of mortgage applications, I previously wrote to Banking and Payments Federation Ireland (BPFI) for its views and any information it can provide in relation to this particular issue. BPFI indicated in its reply that on an annual basis around 2% of primary home mortgages were provided without the requirement for mortgage protection insurance (utilising one of the exemptions as provided for in section 126 of the Consumer Credit Act) and that on an annual basis only 0.05% of mortgage applications were refused due to the fact that the applicant did not put in place an acceptable policy of mortgage insurance.

The Deputy should also note that if a person is not satisfied with the way a regulated mortgage provider has dealt with them in relation to an application for a mortgage, or they believe that the regulated entity is not following the requirements of the Central Bank’s codes and regulations or other financial services law, including the requirement for the regulated entity to act with due skill, care and diligence in the best interest of its customers, the consumer can also complain directly to the regulated entity and, if they are not satisfied with the response from the regulated entity, the response to their complaint from the regulated entity is required to include details for the borrower on how to refer their complaint to the Financial Services and Pensions Ombudsman.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

146. To ask the Minister for Finance if he has had recent discussions with the Central Bank in relation to the need to ensure an adequate retailed banking system throughout all regions; and if he will make a statement on the matter. [54333/21]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The retail financial services sector is undergoing a major period of change. This year so far we have seen several major announcements including the withdrawal of Ulster Bank by NatWest and the potential withdrawal of KBC Bank Ireland, the closure of a large number of bank branches by Bank of Ireland and a smaller number by AIB. Decisions in this regard, including the management of branch networks, are the sole responsibility of the board and management of the banks, which must be run on an independent and commercial basis.

While these recent announcements are regrettable, Ireland continues to have an extensive network for banking services, including post offices and credit unions. In addition, AIB and Bank of Ireland customers can now lodge and withdraw money and Ulster Bank customers can lodge money at 900 An Post offices across the country.

The changes currently taking place in the Irish retail banking sector are a reflection of the wider challenges banking is facing, not only in Ireland but also abroad. It is because of these changes that I announced in Dáil Éireann on 1 July 2021 that my Department will undertake a broad-ranging review of the retail banking sector to look at, inter alia, expectations of the sector, competition, consumer protection and consumer choice, the sector’s key role in the provision of sustainable credit to the economy, the availability of credit to SMEs from both banks and non-banks and options to further develop the mortgage market. The structure and delivery channels of the retail banking sector will also be assessed as part of this review.

The review will also look at the cost of doing business for the sector, including impacts on its sustainability and the forces for change at play or foreseen, be they related, for example, to COVID-19, Brexit, climate change, housing, regulation or technology.

I will bring a Memo for Information to Government in the coming weeks before publishing the Terms of Reference of the Review.

I, and my officials have regular engagement with the Central Bank on a variety of issues related to banking and the banking review will involve ongoing engagement with a wide range of stakeholders, including the Central Bank of Ireland, to develop a fuller analysis of future banking challenges.