Irish Mortgage Holders Organisation (IMHO) response to the Department of Finance National Literacy Strategy
The Irish Mortgage Holders Organisation (IMHO) is a registered charity which operates on a not for profit basis. Since its foundation in 2012, IMHO has helped thousands of families in the area of financial education. Our advice activities include financial advice; mortgage advice; debt resolution; financial literacy education; understanding the Irish financial lending system; and advice on how to engage with financial institutions and financial lenders. Our aim is to facilitate independent mortgage/debt resolution advice and financial education, as well as assisting and supporting people in allowing them to deal with their indebtedness and to move on with their lives.
IMHO welcome the Department of Finance plans and are of the view that financial literacy is an iterative and ongoing process. Sustainable and lasting financial literacy must start at early childhood education in schools and classrooms, which will give rise to a multiplier effect throughout adulthood. Currently, complicated financial products and services are readily available to apply for through multiple devices and platforms. In some cases, approval can be granted within minutes. In our experience, we have found that people only know a portion of what they are applying for and not least the repercussions. Comprehensive financial literacy education from an early age, as well as transparent communication from financial lenders will go a long way in addressing this problem. IMHO stress that it is essential that the most vulnerable in society are protected in developing this strategy. Critical stakeholders in this process such as the Central Bank of Ireland (CBI) have traditionally not acted speedily or effectively to protect or educate Irish citizens. Moreover, the role of the Financial Services Ombudsman has been reduced to a blunt instrument. Consumers have suffered and it is now clear that a separate consumer protection entity for the sector is required with the development of the strategy. The CBI and Financial Services Ombudsman appears to be massively conflicted in both their remit and powers. Moving forward, IMHO would like to see the remit of the ombudsman include widespread and comprehensive financial literacy advice on the granular detail that financial lenders provide in order to safeguard the most vulnerable in society. IMHO is also of the view that if a robust regulator capable of widespread enforcement and financial education is not in place, then credit servicers should be prevented from offering their full suite of products to the unknowing and vulnerable public.
It has become painfully clear to the IMHO that Consumers and SMEs are subservient to the needs of the financial institutions and financial lenders. Many individuals and families are under severe financial pressure yet the supports the Government and overall financial ecosystem sector can provide via the financial literacy education is severely lacking for these customers. IMHO empowers people with the knowledge to make informed decisions about their mortgages, financial choices, and overall financial wellbeing. IMHO have recently participated in policy discussions and consultation’s (the Department of Finance Retail Banking Review Consultation and the EU Financial Consumer Directive Consultation) and have been invited to give expert evidence at a range of Oireachtas Committee hearings advocating for consumer-friendly policies.
Republic of Ireland
The objective of our financial advice is to provide clear, transparent, and compassionate information and financial advice to consumers. It is imperative that banks and financial institutions for example, are not the sole provider of this information. IMHO have a wide range of stakeholders who we work with to dispense financial literacy information and we commend the ongoing work of MABS (Money Advice Budgeting Service) in this regard. The IMHO strive for a balance in our advice to allow citizens to engage with financial institutions in an efficient and empathetic manner with a focus on realistic solutions. Every effort must be made by Government to create a financial literacy strategy primarily focused on meeting the needs of all citizens, consumers, and SMEs in a holistic and comprehensive manner.
IMHO have a highly qualified team of financial advisers who are dedicated to building sustainable solutions for the public.
Since its foundation in 2012, IMHO has helped thousands of families in the area of financial education. The IMHO has assisted approximately 20,000 borrowers in arrears, with a total debt of approximately €4.5 billion, in the past eight years.
We work closely with all other debtor support organisations such as MABS, Free Legal Advice Centre (FLAC), and the Insolvency Service of Ireland along with the many personal insolvency practitioners and financial advisory services throughout the country.
A robust financial literacy programme is vital for Ireland. A reduction in financial stress will help people better manage their finances, reduce debt, and plan for the future. In terms of consumer protection, financial literacy can empower consumers to recognise and avoid financial scams and predatory lending practices which are at an all-time high.
The critical need for transparent and clear financial literacy, competitive products and consumer choice in the market should be at the forefront of legislator plans. A concerted effort is urgently needed from all stakeholders to reinforce the significant value of financial literacy. Ultimately, consumer choice, competition and protecting the rights of the consumer has been down the pecking order for lenders and regulators. This is evident in what IMHO see and engage with daily. Ireland has a dysfunctional lending market. It is our view that a separate entity should be installed with the remit of protecting borrower’s rights and greatly enhancing market competition, market protection and financial literacy. IMHO has significant front-line experience of actual financial literacy challenges and not from any observer’s seat. The mental health of thousands of citizens has been and is suffering from the effects of being tortured by banks, creditors and a system that has protected banks, big corporations and developers but abandoned ordinary citizens. By equipping people with the knowledge and skills to navigate their finances effectively, such a strategy can contribute to financial stability, economic growth, and improved quality of life for all citizens. Financial literacy must be universal, and IMHO welcome this fundamental change in the Government’s approach to addressing the issue. IMHO is willing and able to assist all auspices of the Government and pertinent stakeholders to ensure this strategy becomes futureproofed for all.
There needs to be an overall financial literacy strategy that brings together work being done by a range of public and private bodies. IMHO is one of two registered national charities that advocate for and help people who are in debt and struggling with financial literacy advice. The fact that there are only two tells a great deal in comparison with other sectors. We negotiate with creditors, informally and formally, via the Insolvency Service of Ireland,. All citizens (target groups) are at risk of poor financial literacy mismanagement because of grossly unfair practices from financial institutions.
Contact details: David Hall, Irish Mortgage Holders Organisation, Unit 9, 1 st floor, Merchants House, 27 – 30, Merchants Quay, D8 Email: email@example.com Responding as a representative body and registered charity.