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

The firms that provided mortgages - the banks and the building societies - are traditionally regulated by the Central Bank under protocols and regulations. In the new circumstances in which loans are sold as portfolios, we want to ensure that the same regulation applies to those as historically applied to the mortgagee and the mortgage offerers with which we are all familiar.

The Central Bank's quarterly report in April last stated that there were 758,988 mortgages altogether, which is a lot of mortgages. It showed that a total of 42,169 accounts were with non-bank lenders, which included both regulated retail credit firms and currently unregulated entities. I understand the breakdown between regulated and unregulated entities is that two thirds are regulated and one third are unregulated - that is, approximately one third of the 42,000 accounts are unregulated. The quantum we are talking about, and that we are enacting this legislation to cover, is 14,000 out of 750,000. With the additional sales since April, that 14,000 may now be 15,000 or 16,000. That is the nature of what we are doing.

Some owners, as investors, buy the portfolio. I do not have the examples the Deputy quoted, but loans are not sold individually but as portfolios. As for individual loans being sold on, I do not understand that. Once we pass this legislation, the people providing the credit servicing will have to follow the code of conduct on mortgage arrears which the Central Bank has prescribed. They will also have to follow the clear guidelines on how to communicate. The offensive way in which some mortgage owners communicated will have to stop, and they will be fully covered.

Our original intention, as the Deputy suggested, was to cover the credit servicing firms and also the owners, but there is a cost in regulation. If unnecessary regulation is applied to people who do not need to be regulated, there is a cost in that and, ultimately, the cost will fall on the borrower. After Second Stage and after the conversations we had here, we decided there was a more focused way of doing it.

We have decided that the provisions of the Bill would apply to the credit servicing agencies and firms and if the owners were acting in that capacity they would also be covered by the regulation, or if the owners were giving instructions, either day to day or intermittently, to the credit servicing agencies then they would be covered by amendment No. 20 and it would be illegal for them to give such instructions, so every eventuality is covered. Therefore, the Deputy's amendment is unnecessary and would add extra expense for borrowers if I were to accept it. That is the reason I am not accepting it.