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

It is clear from section 1(f) that the owner is constrained in what he may do. All credit servicing firms will follow the same regulations. On the issue of owners based outside Ireland, I have a note, which I read. Relevant Irish financial services law, including the Consumer Protection Code 2012, the code of conduct on mortgage arrears and the Consumer Credit Act 1995, applies to the regulated activities of regulated entities. The Central Bank codes apply to the lending activities of all regulated entities except credit unions operating in the State including, inter alia, a financial service provider that is authorised, registered or licensed in another European Union or EEA member state and that has provided, or is providing, lending activities in the State. Any agent acting on behalf of a regulated financial service provider - that is, where an activity is outsourced - must comply with the requirements of Irish financial services law, including the code of conduct on mortgage arrears, and a failure to do so may result in the Central Bank imposing penalties on the regulated financial services provider concerned. The Bill will work by requiring that firms that service credit are authorised by the Central Bank and are therefore subject to regulation by the bank and also have access to the Financial Services Ombudsman's regime. The Bill will therefore regulate the activity of credit servicing and the credit servicing firms engaged in such activity, irrespective of where the loan book owner is based. In order that the borrowers retain the protections they had before the loan book was sold, all consumer and SME loans which are sold by regulated financial institutions will be covered by these amendments and retain the protections they have already.

The approach we are taking to regulating servicing firms is taken because it is the credit servicing firm that interacts with customers. It is the customers who require the protection and it is the protection from the interaction that is required. But if the owner skips the middleman and decides to be his own servicer, he is regulated then as the credit servicing firm.