Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I thank Senators Wilson and O'Brien for the amendment. From the discussion on it on previous Stages in the Dáil, I understand its aim is to ensure that the consumer is correctly informed and protected, but I am not accepting it for reasons I will now outline.

It seeks to impose obligations on credit servicing and other firms regarding credit which is sold. The first set of obligations concern commercial information on the deal to sell the credit, in other words, the terms under which it was sold and whether the loans were sold at a discount. However, the terms of the individual's contract with the lender are not changed by the sale of the loan. It is, therefore, difficult to see any benefit in making this information known to the borrower as it essentially concerns the contract of sale between two private entities. The term of this contract, as I have said, does not impact the borrower's contract with the person who owns his or her mortgage, therefore his or her obligations under such a contract remain the same.

For example, even if the overall loan book is sold at a discount, the amount owed by the individual borrower does not change, nor do the terms and conditions. This Bill is about ensuring one is not at a disadvantage if one's loan is sold to another provider. Furthermore, these loans are usually bundled for sale at an aggregate price and individual loans are not separately priced, thereby making it difficult for a customer to be advised of the exact terms or price under which his or her loan was sold. These bundles are often made up of non-performing as well as performing loans. The overall price of sale takes these factors into accounts. In any event, the price at which a loan is sold does not change the circumstances of the borrower because the amount he or she owes on the loan, which is the bottom line, remains the same and is not affected by the sale.

The second set of obligations mentioned in the amendment concern the borrower's rights under the code of conduct on mortgage arrears and access to the Financial Services Ombudsman. Following the enactment of this Bill, the rights of a borrower under the code and the right of access to the Financial Services Ombudsman will be the exact same as when the loan was with the originating bank and are not changed by the sale of the loan. Therefore, I do not consider it necessary that the borrower be given any additional reminder of his or her rights. In fact, such a reminder may serve to frighten the borrower into fearing that his or her circumstances have changed when in fact the rights that he or she had before the loan book was sold remain the same. That is the purpose of the Bill.

I must again stress the importance of passing the Bill so that borrowers will have the same rights as they had prior to the sale of the loans, but I do not consider the Senator's amendment as adding to the protections for consumers, which is the aim of the Bill. I regret, therefore, that I am not in a position to accept the amendment.