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

I appreciate the aim of Deputy McGrath’s amendment is to ensure the consumer is correctly informed and protected, but I am not accepting the amendment because the consumer is already sufficiently protected under the terms of the Bill. Essentially, the amendment seeks to impose obligations on credit servicing and other terms in relation to credit which is sold. The first set of obligations concern commercial information on the deal to sell the credit, that is, the terms on which it was sold and whether the loans were sold at a discount. However, the terms of the individual’s contract with the lender are not changed by the sale of the loan. It is therefore difficult to see any benefit in making this information known to the borrower, as it essentially concerns the contract of sale between the two private entities. The terms of the contract do not impact the borrower’s contract with the person who owns the mortgage and so their obligations under such a contract remain the same. For example, even if the overall loan book is sold at a discount, the amount owed by the individual borrower is not changed nor are the other terms and conditions governing the loan.

It is also worth remembering that usually the loans are bundled for sale at an aggregate price and individual loans are not separately priced, making it difficult for the customer to be advised of the exact terms or price under which his or her loan was sold. The bundles are often made up of non-performing loans as well as performing loans, so the overall price of sale takes into account such factors. In any event, the price at which a loan is sold does not change the circumstances of the borrower because the amount they owe on the loan, which is of course the bottom line, remains the same, and it is not affected by the sale.

The second set of obligations mentioned in the amendment concern a borrower’s rights under the code of conduct on mortgage arrears and access to the Financial Services Ombudsman. Following the enactment of the Bill, the rights of a borrower under the code of conduct on mortgage arrears and the right of access to the Financial Services Ombudsman will be the exact same as when the loan was with the originating bank and are not changed by the sale of the loan book. Therefore, I do not consider it necessary that the borrower be given an additional reminder of their rights in light of the fact that they have not changed. In fact, such a reminder may serve to frighten the borrower into assuming their circumstances have changed when the rights they had before their loan books were sold remain the same after the sale is completed.

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