Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I move amendment No. 7:

In page 7, between lines 13 and 14, to insert the following:“(3) A person who carries on the business of credit servicing exclusively for an already regulated financial service provider shall be required to be regulated under this Act.”.

I discussed the issue at length on Committee Stage so we will not go through all the points again. Essentially, we wish to include in the Bill reference to: “A person who carries on the business of credit servicing exclusively for an already regulated financial service provider shall be required to be regulated under this Act.”

On Committee Stage the view of the Minister was that either the owner of the loan or the financial service provider is regulated. However, there should be no reason both could not be regulated. The owner of the loan and the person to whom I refer as the local agent - the person who engages with the individual borrower – should also be regulated. I made the point on Second Stage that I am concerned that it would suit some banks or regulated Irish financial institutions to sell a bundle of troublesome loans and make an exclusive deal with a financial service provider to manage a particular set of loans. I refer to situations where a bank would sell 1,000 or 2,000 troublesome loans. The Minister's position is that because the bank is regulated and it has an exclusive deal with one company whose sole purpose is to service the loans and deal with the customers, the service provider does not require to be regulated because the original owner of the loan is regulated. It is essential that while the owner of a loan should be regulated, in all circumstances the person responsible for the provision of financial services should also be regulated specifically in those areas.

There is a lacuna in the legislation whereby this particular group of financial services providers are being let of the hook of regulation because they have an exclusive agreement with the original loan provider. This lacuna should be closed off.

See this speech in context