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

As the Deputy will be aware, the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 was enacted on 8 July 2015. It was introduced to fill the consumer protection gap where loans were sold by the original lender to an unregulated entity. The 2015 Act introduced a regulatory regime for a new type of entity called a credit servicing firm. Credit servicing firms are now subject to the provisions of Irish financial services law that apply to regulated financial service providers. This ensures that relevant borrowers whose loans are sold to third parties maintain the same regulatory protections they had prior to the sale, including under the various statutory codes, such as the consumer protection code, the code of conduct on mortgage arrears and the code of conduct for business lending to small and medium enterprises.

The Central Bank is now the competent authority for the authorisation and supervision of credit servicing firms. Credit servicing firms must comply with all relevant requirements of financial services legislation, including the various codes mentioned already and fitness and probity standards, including minimum competency requirements. In addition to compliance with Central Bank codes of conduct, credit servicing firms will have to demonstrate to the Central Bank that they have robust governance and adequate resources to ensure compliance, agreements with loan owners that enable the credit servicing firm to fully comply with its obligations under Irish financial services legislation, and adequate and effective control of loan servicing in the State to enable Central Bank oversight.

As the Deputy will be aware, policy in this area is kept under review to ensure that consumers are adequately protected. In this regard, the code of conduct for business lending to small and medium enterprises has recently been updated. The code of conduct on mortgage arrears has also been reviewed and updated over time. The Government will work with the Central Bank to ensure that the code continues to be relevant, fair and balanced in respect of the legitimate interests of debtors and creditors all the while promoting the availability of sustainable solutions to address genuine mortgage difficulty. In that regard, I have recently raised the issue with the Governor of the Central Bank.

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