Mortgage refusals for subsidy recipients
Deputy McNamara said banks are refusing mortgages to people on the EWSS and similar supports, suggesting the issue should be treated like anti-discrimination rules for tenants. The Tánaiste said he had raised the matter with banks and would do so again, but argued prudent lending obligations remain essential.
It has come to my attention that banks are refusing mortgages to people on the employment wage subsidy scheme, EWSS, and other similar pandemic subsidies from the Government. I refer not just to one bank but to many, in different counties, so it is now a systemic problem. One might say a mortgage relationship is a private contractual relationship between an applicant and a bank, but one might equally say accommodation is a private contractual relationship. Nevertheless, we have outlawed discrimination by landlords against people in receipt of the housing assistance payment, HAP. If this practice continues, will the Government ban discrimination against mortgage applicants whose employers are in receipt of the employment wage subsidy scheme?
Comment on this
This has come to my attention too. There are a number of cases in my constituency, and I have discussed the issue with the banks and will do so again in the regular engagement I have with them. I do not think it is simple as a matter of discrimination. Banks have certain responsibilities and among them is to engage only in prudent lending. If they lend money to somebody who cannot pay it back, that has an impact on wider society. It means a loan is not paid back and harder credit and higher interest rates for everyone else.
Banks have a social responsibility, therefore, to ensure they do not engage in lending money to people who cannot pay it back. One of the real concerns that a bank has, and has to have, in respect of somebody on the employment wage subsidy scheme is whether that job will still be there in three, six or nine months' time when the scheme is gone. It is something they have to take into account. I know that is difficult to hear but it is not in anyone's interests for banks to issue mortgages to people who might not be able to repay them. We hope that in the vast majority of cases, people who are on the EWSS will not have to be on it in a few months' time and that they will be fully paid by their employer again, but there is a risk they will not and banks have to take that into account because of the wider social implications.