Neale Richmond (Dublin Rathdown, Fine Gael)
Link to this: Individually | In context | Oireachtas source

314. To ask the Minister for Finance if performing mortgages sold by a bank (details supplied) after the economic crash should retain their original terms and conditions, including interest rates, and be afforded the same protections afforded to mortgage customers from traditional banks; and if he will make a statement on the matter. [63627/22]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Where a mortgage or other credit agreement is sold or assigned the terms and conditions of the agreement, including those terms in relation to the interest rate, remain in place and the entity which acquires the agreement cannot be in a better position than the entity which sold the agreement and cannot unilaterally change the terms of the agreement.

In terms of regulation, the Central Bank has put in place a range of measures in order to protect consumers who take out or have a mortgage.  This consumer protection framework seeks to ensure that lenders are transparent and fair in all their dealings with borrowers and that borrowers are protected from the beginning to the end of the mortgage life cycle, for example, through protections at the initial marketing/advertising stage, in assessing the affordability and suitability of the mortgage and at a time when borrowers may find themselves in financial difficulties. The requirements put in place by the Central Bank complement the European legislative framework, including the European Union (Consumer Mortgage Credit Agreements) Regulations 2016.

Where a loan is sold or assigned to another entity, the consumer protections that were available to borrowers prior to the transaction continue to be in place with the new owner. It is worth noting that under the Consumer Protection (Regulation of Credit Servicing Firms) Acts 2015 and 2018 if a loan is assigned or sold, the new holder of the legal title to the credit and the servicer must be regulated and must act in accordance with Irish financial services law that applies to ‘regulated financial service providers’.  This ensures that consumers whose loans are sold or assigned maintain the same regulatory protections that they had, including under the various Central Bank statutory Codes of Conduct such as the Consumer Protection Code 2012 and the Code of Conduct on Mortgage Arrears 2013.

In this regard the Deputy may wish to note that, in the case of variable rate mortgage holders, the Central Bank introduced a number of increased protections in February 2017. The enhanced measures, which are provided for in an Addendum to the Consumer Protection Code 2012, require regulated entities to explain to borrowers how their variable interest rates have been set, including in the event of an increase. The measures also improve the level of information required to be provided to borrowers on variable rates annually about other mortgage products available from the entity which could provide savings for the borrower. The regulated entity must also signpost the borrower to the CCPC’s mortgage switching tool. However, subject to the terms of any individual contract, decisions on the level of interest rates or the provision of credit are commercial matters for the individual regulated entity.  

More generally, the Central Bank has advised that it expects that all regulated entities take a consumer-focused approach in respect of any decision that affects their customers (existing and new) and to communicate clearly, effectively and in a timely manner with all customers.