Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I thank the Deputy. I do not propose to accept the amendment proposed by Deputy Doherty for the following reasons. The amendment would prevent the sale of mortgages to an entity which was in the process of obtaining authorisation from the Central Bank. Additionally, in the event that the code of conduct on mortgage arrears were repealed or replaced by the Central Bank of Ireland, this amendment would potentially prevent the sale of these assets permanently, even if equivalent or greater protections applied in a potential purchaser. In addition, the amendment would potentially give rise to a contaminant effect on the broader pool of assets of Bank of Ireland in that it could become difficult to identify which assets were transferred from ICS into the broader pool of assets owned by Bank of Ireland. This could potentially give rise to legal complexities in respect of any further sales of loan assets by Bank of Ireland, regardless of whether those assets had been transferred under this Bill.

However, I agree with the objective of this amendment. This Government is committed to bringing forward legislation to protect mortgage holders and believes that the Sale of Loan Books to Unregulated Third Parties Bill is the most effective way to address the issue in a comprehensive manner. That legislation will ensure that the protections of the CCMA or any replacement code in the future continue to apply to mortgages which are sold to unregulated financial service providers.

That legislation is being actively progressed and will be brought forward to the Oireachtas when finalised. If enacted, the Bill being debated today will permit the transfer of assets and liabilities from building societies to banks only; it does not allow the transfer of assets to other entities other than licensed banks. As all the banks are regulated financial service providers, they are required to comply with the Central Bank's code of conduct on mortgage arrears in any case. However, this amendment proposed by Deputy Doherty would address the matter in an incomplete manner as it refers specifically to the code of conduct on mortgage arrears. It is not appropriate to refer to that specific code in primary legislation as it could require a primary legislative change were the code to be superseded or repealed or could be rendered ineffective in the absence of such an amendment to primary legislation.

I cannot commend to the House an amendment that would unsatisfactorily address the issue which the Deputy intends to address, especially when, as I have said, a dedicated piece of legislation is being prepared on the matter with the best interests of the consumer in mind. It would not be appropriate to deal with this issue as part of this Bill as the sale of loan books to unregulated third parties Bill, which is listed in the Government's legislative programme, is intended to address the concerns surrounding the applicability of CCMA, following the sale of loan books to unregulated entities in a comprehensive manner. Officials in the Department of Finance are engaging with the Central Bank and the Attorney General's office to ensure that mortgage-holders will be protected. The Government will continue to work with other interested parties to achieve the best solution for consumers. For these reasons I believe the proposed sale of loan books to unregulated third parties Bill is the appropriate way to address these issues. I do not accept the amendment.