Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

The issues in sections 2 and 3 return to the core point of who should be regulated or not, should it be the credit servicing firm or the retail credit firm. My view is that it should be the retail credit firm, therefore, this would also need to change.

I wish to raise two points on the new section 2. I am concerned about the issue of not regulating the credit servicing firm, if the owner of the loans is regulated, because that will become the norm. Under this legislation, we would regulate the owners with the lightest type of regulation which is the credit servicing firm regulation. Therefore, the servicing firms that the people deal with and interact with will not be regulated. The argument for that approach is that the owner is regulated so that they can be pursued. I am unsure if that is the best approach. It goes back to the original point of whether we should leave the credit services unregulated under the existing legislation and the owner should be regulated as a retail credit firm, which would resolve this issue and ensure that those who are interacting with individuals, sending out letters in some cases, not responding and so on, cannot take a gloves-off approach because they themselves are not under the scope of the Central Bank as an entity while the fund which contracted their services would be and could be held accountable for their role. In this scenario, it would be better that both would be regulated. The new subsection (2) makes it clear that can happen where there is a credit servicing firm that is regulated, and the owner is regulated, that both can coexist but it also allows for them not to coexist, and for one not to be regulated. I am concerned about that and would like to revisit it on Report Stage. I say Report Stage because the whole issue of whether it should be a retail credit firm goes to the core of how we approach this legislation. I would like to hear the Central Bank's view on that.

My second point relates to securitisation. I am sure that this is not the case, however, where the holder of credit, that is, the vulture fund, secures a part of that debt through the process of securitisation, the vehicle that would be established would not come under the regulation of this Bill. Is it the case that the owner of the debt would still be regulated? If a vulture fund secured 15% of the debt through securitisation that would not exempt it from regulation under this legislation. I refer to section 3 of the Bill.