Mr. Edmund Honohan:

It is true that debt servicers can appoint agents but they are all subject to the main body of the directive, which is to ensure people who are employed as debt servicers are decent chaps who know how to tie shoelaces and generally behave themselves. These are all venial sins that might be the subject of complaint to the Central Bank. The Central Bank never tells us what is happening.

I do not know whether the Deputy has had a chance to look at the letters I wrote and the replies from the Central Bank. The first reply was in June 2022. There are a couple of very interesting things in it. It related to a particular case where the plaintiff was seeking to secure possession of a piece of land of which it did not even have ownership. It was never mortgaged in the first place but they just misread the file. In paragraph three, the Central Bank stated it could confirm it had, further to my correspondence, engaged with Promontoria on the matter. This is good, is it not? What did the Central Bank say to the company? What was the response? Did it set out a general rule as to what should happen in these cases? Did it say what should happen where there is perjury? No. I do not know whether the Deputy is surprised by this letter in general on the Central Bank's activities; I was surprised.

We mentioned unfair terms and I said that the unfair terms material is not being enforced by the Central Bank and it is happy to let the courts take their own course on this. The courts basically are in a time warp thinking that contract law applies when, in fact, contract law for consumers is now a completely different ballgame. The Central Bank's inactivity in this area gives me cause for concern with regard to credit servicers and purchasers. If this is what they do about unfair terms, what will they do with the servicers? In the document, the Central Bank states that questions as to ownership of title by reference to land registration laws fall outside the competence of the Central Bank. Is that not an admission? It states it will not even look at legal title because it is not part of its remit. It states this several times.

What it said about securitisation was quite interesting. We almost have to read between the lines. First, it tried to explain to me about asset-covered bonds and securities under the 2021 Act. It went on to explain securitisation. It states securitisations are generally structured in a manner whereby an SPV is set up to isolate the securitised loans from the originating bank. It states that when this practice is present in a transaction, then considerations around true sale will be relevant. This is very coy. It flies in the face of what a judge said in a significant case regarding the Bank of Scotland. The judge said that for the system to work, it is absolutely essential that the loan originator should retain the title to the property. Now the Central Bank is saying considerations around true sale will be relevant.

I had asked a specific question of the Central Bank on whether there is any sort of asset-based securitisation in which ownership of the asset is not transferred as collateral. What was the answer to this? It stated that synthetic securitisation would take this form - right. What is the Central Bank saying? It is saying that no other form of securitisation would take this form. All other forms of securitisation involve the transfer of the asset and the only one it can come up with is synthetic securitisation. Mr. Justice McGovern, in a case which went all the way up to the Supreme Court and came back and is being applied throughout the Circuit Court, has been shown to have been poorly informed by counsel who appeared in front of him because this is not the case. That the asset should remain in the name of the originator is not an element. In fact, it is quite the reverse.