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

Let us consider first principles. The purpose of the Bill is to ensure the protection a home owner had before his or her mortgage was sold is restored fully, no more or no less. If someone has lost protection through a sale transaction from a regulated to an unregulated entity, this legislation will restore the status quo. There is no weakening of the regulatory provision. As we have shared, the Bill will apply to approximately 15,000 or 16,000 mortgages out of a total of more than 750,000.

The Deputy raised the issue of interest rates. The aim of the Bill is to ensure borrowers whose loans are sold to unregulated entities will be given the same protection as when their loans were held by regulated entities. That is what the Bill does. That protection will be restored to mortgage holders when it is enacted and signed by the President. Mortgage holders will have the same protection in terms of interest rates as those who have their loans with regulated banks. For example, the first protection for a borrower is his or her mortgage contract. The loan or mortgage contract between two parties specifies the conditions on which an interest rate can change. The regulation on unfair terms in consumer contracts specifies that interest rates cannot change without a valid reason. There is no situation where new owners can arbitrarily change interest rates in the interests of profiteering. That would not be a valid reason. Furthermore, competition applies to the generality of mortgages.

It is important to remember that the aim of the owner of a loan book is to have a book of performing loans. Therefore, significant increases in interest rates could hamper this. I have no evidence of new owners of loan portfolios acquiring ownership for the purposes of possessing property. That is not what happens. The purpose is to make profits on their acquisitions. I have no evidence to date of loan book owners seeking to buy up loans in order to increase interest rates. Nothing has been brought to my attention directly or by the Central Bank. They are prevented under law from doing so arbitrarily, outside the contract loan terms or without valid reasons.