European Union (Consumer Mortgage Credit Agreements) Regulations 2016.
Statutory Instruments
Source: Statutory Instruments

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paragraphs: These Regulations may be cited as the European Union (Consumer Mortgage Credit Agreements) Regulations 2016.
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paragraphs: These Regulations come into operation on 21 March 2016.
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paragraphs: (1) In these Regulations—
(a) denominated in a currency other than that in which the consumer receives the income or holds the assets from which the credit is to be repaid, or
(b) denominated in a currency other than that of the EEA Member State in which the consumer is resident;
(a) where the creditor or credit intermediary is a natural person, the EEA Member State in which his or her head office is situated;
(b) where the creditor or credit intermediary is a legal person, the EEA Member State in which its registered office is situated or, if under its national law it has no registered office, the EEA Member State in which its head office is situated;
(a) any natural person working for the creditor, or mortgage credit intermediary who is directly engaged in the activities to which these Regulations relate or who has contacts with consumers in the course of activities to which these Regulations relate,
(b) any natural person directly managing or supervising the natural persons referred to in paragraph (a);
(a) only one creditor, or
(b) only one group;
(a) interest, commissions, taxes and any other kind of fees, including the cost of valuation of the property where such valuation is necessary to obtain credit, but excluding registration fees for the transfer of ownership of the immovable property and any charges payable by the consumer for non-compliance with the commitments laid down in the credit agreement,
(b) where the conclusion of a service contract is compulsory to obtain the credit or to obtain it on the terms and conditions marketed, costs in respect of ancillary services relating to the credit agreement (in particular, insurance premiums);
(2) A word or expression that is used in these Regulations and is also used in the Directive has the meaning in these Regulations that it has in the Directive.
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paragraphs: (1) In these Regulations “mortgage credit intermediary” means a person (including a firm, within the meaning of the Partnership Act 1890 (53 & 54 Vict.c.39)), being a person who—
(a) is not acting as a creditor, and
(b) is not merely introducing, either directly or indirectly, a consumer to a creditor or credit intermediary,
(i) in the course of his or her trade, business or profession, for remuneration, which may take a pecuniary form or any other agreed form of financial consideration, carries on any of the activities referred to in paragraph (2), and
(ii) either is the holder of an authorisation granted under Regulation 30 or stands admitted, pursuant to Article 29 of the Directive, in another EEA Member State.
(2) The following are the activities referred to in paragraph (1)(i)—
(a) presents or offers credit agreements to consumers;
(b) assists consumers by undertaking preparatory work or other pre-contractual administration in respect of credit agreements other than as referred to in subparagraph (a);
(c) concludes credit agreements with consumers on behalf of the creditor.
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paragraphs: (1) These Regulations apply to:
(a) a credit agreement which is secured by a charge, a mortgage or by another comparable security used in an EEA Member State on residential immovable property or secured by a right related to residential immovable property, and where the person to whom the credit is provided is a consumer;
(b) a credit agreement the purpose of which is to acquire or retain property rights in land or in an existing or projected building, and where the person to whom the credit is provided is a consumer.
(2) These Regulations shall not apply to the following:
(a) an equity release credit agreement where the creditor:
(i) contributes a lump sum, periodic payments or other forms of credit disbursement in return for a sum deriving from the future sale of a residential immovable property or a right relating to residential immovable property; and
(ii) will not seek repayment of the credit until the occurrence of one or more than one life event that is specified in the credit agreement, being a life event falling within a category specified in paragraph (3), unless the consumer breaches his or her contractual obligations in circumstances which allow the creditor to terminate the credit agreement;
(b) a credit agreement where the credit is granted by an employer to an employee or employees as a secondary activity in circumstances where such credit is offered free of interest or at an annual percentage rate of charge lower than that prevailing in the market and not offered to the public generally;
(c) a credit agreement where the credit is granted free of interest and without any other charges except those that recover costs directly related to the securing of the credit;
(d) a credit agreement in the form of an overdraft facility and where the credit has to be repaid within one month;
(e) a credit agreement that is the outcome of a settlement reached in court proceedings or in proceedings before another statutory authority;
(f) a credit agreement, not secured on residential immovable property, which relates to the deferred payment free of charge of an existing debt;
(g) a housing loan made by a local authority, or any other loan not secured by a mortgage made by a local authority for the purposes of carrying out improvement works to a house.
(3) Each of the following is a category of life event referred to in paragraph (2)(a)(ii)—
(a) the death of the consumer (or a surviving dependant of the consumer, or a nominated person residing in the property);
(b) permanent vacation of the property (for example, the consumer ceasing to reside in the property and with no reasonable prospect of return);
(c) sale of the property;
(d) the consumer acquires another property as an alternative principal residence.
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paragraphs: The Central Bank is designated as the competent authority in the State that performs the functions provided for in the Directive.
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paragraphs: (1) Having regard to its statutory function to promote the development of financial education and capability, the Competition and Consumer Protection Commission shall promote measures that support the education of consumers in relation to responsible borrowing and debt management, in particular in relation to mortgage credit agreements.
(2) In addition to the preceding matters, the foregoing Commission shall, in conjunction with any other body it considers appropriate, ensure that clear and general information on the credit granting process is made available in order to guide consumers, especially those who take out a mortgage credit for the first time.
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paragraphs: (1) A creditor or mortgage credit intermediary shall act honestly, fairly, transparently and professionally, taking account of the rights and interests of the consumer, when—
(a) devising or otherwise creating credit products,
(b) granting or acting as an intermediary or providing advisory services on credit (and where appropriate ancillary services) to consumers, or
(c) executing a credit agreement.
(2) In relation to carrying on of any activity referred to paragraph (1)(b), the activity shall be based on:
(a) information about the consumer’s circumstances,
(b) any specific requirement made known by the consumer,
(c) reasonable assumptions about risks to the consumer’s situation over the term of the credit agreement, and
(d) where the activity is the provision of advisory services, the activity shall in addition be based on the information required under Regulation 23(4)(a).
(3) Creditors shall remunerate their staff and mortgage credit intermediaries, and mortgage credit intermediaries shall remunerate their staff, in a manner that does not impede compliance with the obligation set out in paragraphs (1) and (2).
(4) When establishing and applying remuneration policies for their staff responsible for the assessment of creditworthiness, a creditor shall comply with the following principles in a way and to the extent that is appropriate to the creditor’s size, internal organisation and the nature, scope and complexity of the creditor’s activities:
(a) the remuneration policy is consistent with and promotes sound and effective risk management and does not encourage risk-taking that exceeds the level of tolerated risk of the creditor;
(b) the remuneration policy is in line with the business strategy, objectives, values and long-term interests of the creditor, and incorporates measures to avoid conflicts of interest, in particular by providing that remuneration is not contingent on the number or proportion of credit applications accepted.
(5) Where a creditor or mortgage credit intermediary provides advisory services, the remuneration structure of the staff involved shall not prejudice their ability to act in the consumer’s best interest and in particular shall not be contingent on sales targets.
(6) Where a creditor or mortgage credit intermediary intends to require the making of a payment in respect of advisory services or credit intermediate services, and it is proposed that this payment be incorporated into the amount advanced to the consumer, the creditor or mortgage credit intermediary shall, prior to concluding the credit agreement:
(a) inform the consumer, on paper or on another durable medium, that the consumer has the right to make such a payment separately and not include it in the credit agreement; and
(b) provide the following information to the consumer on paper or on another durable medium:
(i) the amount of the payment; and
(ii) the overall cost of making the payment over the term of the loan.
(7) A creditor or mortgage credit intermediary who contravenes a provision of this Regulation commits an offence.
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paragraphs: Information provided to consumers in compliance with the requirements of these Regulations shall be provided free of charge to the consumer.
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paragraphs: (1) Creditors and mortgage credit intermediaries shall require their staff to possess and to keep up-to-date an appropriate level of knowledge and competence in relation to:
(a) devising or otherwise creating credit products, or the offering or granting of credit agreements,
(b) the carrying out of credit intermediation activities as set out in the definition of “mortgage credit intermediary” in Regulation 4, or
(c) the provision of advisory services.
(2) Where the conclusion of a credit agreement includes an ancillary service, creditors and mortgage credit intermediaries shall require their staff to possess appropriate knowledge and competence in relation to that ancillary service.