Dara Murphy (Cork North Central, Fine Gael) | Oireachtas source

I should have explained the reason for the Minister's absence at the outset of my contribution. He is looking forward to engaging constructively on Senators' amendments. The purpose of this Bill is to protect consumers whose loans are sold by regulated financial service providers to unregulated firms. Senators offered broad support for the Bill's overall objectives. While a number of purchasers of loan books have voluntarily agreed to apply Central Bank codes when managing loan books, the Government is introducing this Bill because voluntary compliance is not enforceable. The Bill provides that borrowers retain their protections after their loans are sold, thereby addressing concerns about the continued applicability of the Central Bank's codes and access for borrowers to the Financial Services Ombudsman. I have noted the points raised by Senators during the course of the debate and they will be considered carefully prior to Committee Stage, when they can be further explored.

On the issues raised by Senator Darragh O'Brien, it was initially believed that the best approach was to regulate the new owners of loan books but the approach evolved on foot of the public consultation last July and August, which sought a broad range of views. Further consideration on Committee Stage may be warranted. The Bill also benefited from input from the Central Bank and the Office of the Attorney General. The public consultation process highlighted an issue with the original approach which would facilitate the use of special purpose of vehicles and the outsourcing of loans to unregulated firms.

Senator Gilroy referred to sales of credit union loan books. This is not known to have happened and, while that is not to say it could not happen, it would be an unwelcome development. We are taking a belt and braces approach in this respect.

In order to further strengthen the protections for borrowers, a new section 5 has been added to provide for a statutory prohibition on a credit servicing fund doing something which is a proscribed contravention if performed by a retail credit firm. This provision also prevents the owners of credit from instructing a regulated credit firm to perform such an action.This copperfastens the protections for borrowers and ensures that owners' hands are very much tied in terms of what they can do in order to ensure that they do not act in a way that needs authorisation as a credit servicing firm and that they do not commit an offence by instructing a firm servicing their credit to do something or fail to do something which would be a proscribed contravention.

I thank Senators for their constructive engagement on this very important Bill. Most of those in opposition have engaged with it, although Sinn Féin Members were not particularly engaged with our deliberations today which is unfortunate because broad engagement by Members enables us to arrive at the best possible legislation. I hope priority will be given to this Bill and I know that the Minister and his Department will engage fully on Committee Stage.