Retail Banking: Deposits, Mortgages and Consumer Protection
What this domain tests
Retail Banking covers deposits, payments, mortgages, consumer credit, complaints and vulnerable customers. The exam tests product mechanics, the Consumer Protection Code, deposit guarantee rules and the Central Bank of Ireland mortgage measures.
Core rules
- The Deposit Guarantee Scheme protects €100,000 per depositor per bank; a joint account has €200,000 cover. Temporary high balances may get extra protection.
- Mortgage measures include a 3.5 times loan-to-income limit and loan-to-value limits: generally 90% for first-time buyers and 80% for others, with limited exception allowances.
- Lenders must assess affordability, verify income and stress-test repayments; approval in principle is not a guarantee of drawdown.
- The Consumer Protection Code requires clear information, arrears handling and a complaints process; unresolved complaints can go to the Financial Services and Pensions Ombudsman.
- Payment services must apply strong customer authentication and fraud monitoring.
Worked example
A couple earns €90,000 gross and has €45,000 deposit for a €400,000 house. The loan-to-income cap gives €315,000; the 90% loan-to-value cap gives €360,000. Income is binding, so the maximum loan is €315,000. They need a €85,000 deposit plus costs, leaving a €40,000 shortfall. An exception may allow more, but affordability and stress testing still apply. The bank should not treat the deposit as sufficient without checking fees, insurance and closing costs.
Traps
- Counting the deposit without purchase costs.
- Assuming €100,000 cover applies per account rather than per depositor per bank.
- Using unverified overtime or bonuses.
- Confusing approval in principle with a binding offer.