Mr. Paul Joyce:

I have similar letters here. It is rather disturbing to see debt collection outfits or credit servicing firms, if one wants to call them that, transferring loans among one another. We said in our original submission that the loan sale phase is towards the final end of a boom–bust scenario, as in the United Kingdom in the late 1980s and into the early 1990s. We said to the Department of Finance, among others, long prior to the passage of the credit servicing legislation in 2015, that this was a phenomenon that had happened in other countries. Loan sales comprise international business. Not only is the sale of loans to funds international business but so too is the sale of loans to other funds. Therefore, there are transactions down the line. The position of the Central Bank is that the credit servicing firms are regulated and, therefore, they are regulated entities just like banks, which suffices. The problem is that they are not regulated to the extent that their hands can be tied or they can be forced to take a certain course of action. It is absolutely true that the code of conduct on mortgage arrears now applies to credit servicing firms as a result of the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015, as amended. The code only obliges the credit servicing firm to do the same as it ever obliged the original lender to do, that is, to consider accommodations and decide for itself whether it wishes to offer an accommodation.

As the Deputy rightly pointed out, the pillar banks have customers, branches and contractual relationships and reputations to maintain in the State and do not want to be associated with the kinds of tactics funds get involved in. We are now seeing the most difficult part being shovelled on for others to deal with, and they will not have the same commercial scruples. That is the danger.