Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

I wish to thank Deputy Michael McGrath again for the preparation of this Bill, and the other contributors to this debate this evening.

As the Minister said earlier in the debate, it is important to put the issue in its broader context. Much has been done by the Government to help keep people in their homes, including the credit servicing legislation, the code of conduct on mortgage arrears, changes to the personal insolvency regime and the Abhaile scheme.

Non-performing loans have reduced by 60% from their peak in 2013. However, the banks, including the banks in which the State has a significant investment, still need to further address their non-performing loan books. One way to do this, and to do this in large numbers, is to sell groups of loans to other entities which may not be regulated by the Central Bank. As things currently stand, if the loan owner is unregulated, they can only operate in Ireland through a regulated credit servicing firm which is regulated by the Central Bank. However, public concern about the possible actions of unregulated loan owners means that we must do something to reassure the public that these funds will not have carte blancheto do anything they want, regardless of the effect on the householders.

The fears and concerns of borrowers whose loans are being sold are real, but I would nonetheless encourage them to resume contact with their existing lender to ascertain their position and to see what can be done to help resolve their situation and address their position. I accept that there are issues with the legislation as currently drafted and that we will need to put a significant amount of work in to address these issues. The Minister has made a commitment that his officials will work with the Deputy in order to make the legislation more effective and, where necessary, ensure that it can be implemented on a practical level.

We have to get this legislation right in order to make sure that it does what it is intended to do and does not have any negative unintended consequences. We will have to pay particular attention to the definition of credit agreement owner. The policy intent, as stated in the explanatory memorandum, is that the owners of mortgage loans and of SME loans will be regulated. We could explore this in more detail later. Should owners of consumer loans not also be included? What about corporate loans? What about loans which were never the subject of consumer protection legislation such as intra-company loans? Let us be perfectly clear. The Government is supporting this legislation, but we need to get it right and we will work together to get it right.

As the Minister said, he is meeting with the main banks this week and last week as part of the regular engagement process. He has said that he will take these opportunities to again make it clear to the banks that they need to be fully cognisant of customers' concerns about their actions. The Minister has asked the Central Bank to review the existing code of conduct on mortgage arrears, CCMA, to examine areas where it may need to be strengthened and to report to him on the issue as soon as is practically possible. As things stand, the CCMA is a statutory code which provides a strong consumer protection framework to ensure borrowers in arrears or pre-arrears in respect of a mortgage loan secured on a primary residence are treated in a timely, transparent and fair manner. The code is part of financial services legislation and applies to all regulated financial service providers. This Bill seeks to apply the CCMA to mortgages which are not already covered by the code. Presumably this would include buy-to-let mortgages and mortgages where the borrower is not in any danger of falling into arrears.

The Bill has a number of provisions in relation the Central Bank, and it appears that it may be appropriate that this Bill be referred to the European Central Bank for its observations. Under Standing Order 149(3), it would be a matter for the relevant committee to consult with the European Central Bank. I appreciate that there is an urgency in relation to this legislation because of the pending sale of Permanent TSB loans.

I also welcome the Bill as introduced by the Deputy and support the policy intent behind it, but it will take significant work to develop it to a level where it can be an effective piece of legislation. The Government has committed to support this Bill, and I and the officials in the Department will provide whatever assistance that we can to this development.

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