Mary Butler (Waterford, Fianna Fail) | Oireachtas source

I thank Deputy Troy for raising this issue. I am taking this on behalf of the Minister, Deputy Chambers, who had a Cabinet meeting this afternoon and so is not in a position to attend. The Central Bank has put in place a range of measures to protect consumers who take out or have a mortgage or other loan. This consumer protection framework seeks to ensure all Central Bank-regulated entities are transparent and fair in all their dealings with borrowers and borrowers are protected from the beginning to the end of the mortgage life cycle, for example, through protections at the initial marketing and advertising stage, in assessing the affordability and suitability of the mortgage, and at a time when borrowers may find themselves in financial difficulties.

This consumer protection framework applies to all Central Bank-regulated entities that provide credit to consumers. Following the enactment of the consumer protection Acts of 2015 and 2018, and more recently the European Union regulations of 2023, the Central Bank consumer protection framework equally applies to any entity that services or, where applicable, holds the legal title to the rights of a creditor under a mortgage or other credit agreement. Any entity, therefore, which purchases a loan or acquires the legal rights of a creditor under a consumer credit agreement, unless it already has an appropriate authorisation from the Central Bank, will be required to be authorised or regulated by the Central Bank. These regulated entities must act in accordance with Irish financial services law and with the consumer protection regulatory framework that applies to all Central Bank-regulated firms.

This means that when a creditor sells or assigns its legal rights under a credit agreement to another creditor, the consumer protections that were available to borrowers prior to such a transaction remain in place. While the level of consideration paid for the sale and purchase of a portfolio of loans is a commercial matter for the parties to that particular transaction, the new creditor which acquires the contractual rights and benefits of the creditor following such a transaction will do so based on the terms of the existing loan agreement and based on the regulatory protections available to customers. Any new creditor will accordingly only be able to operate and enforce a credit agreement in accordance with the relevant terms of the particular agreement and in accordance with the relevant consumer protection framework.

This consumer protection framework is strong and it includes the various Central Bank statutory codes of conduct such as the consumer protection codes and the code of conduct on mortgage arrears. The code of conduct on mortgage arrears, in particular, provides specific protections to borrowers in arrears or facing a prospect of arrears on a loan secured on a primary residence. Under the CCMA, all relevant regulated entities such as a bank, a retail credit firm or a credit financing firm must proactively encourage borrowers to engage with it about financial difficulties that may prevent the borrower from meeting his or her mortgage repayments. When a borrower is experiencing repayment difficulty, a regulated entity must explore all of the options for an alternative repayment arrangement offered by the entity to determine if a more suitable and sustainable repayment option is available based on the borrower’s individual circumstances. If a borrower is not satisfied with the options proposed or if the regulated entity declines to offer an ARA, an appeals mechanism is provided for it in the CCMA. In addition, a regulated entity must review an ARA at intervals that are appropriate to the type and duration of the arrangement, including at least 30 calendar days in advance of an ARA coming to an end.

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