Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I thank Senator Wilson for his amendment. This issue was also discussed on Committee and Report Stages in the Dáil and I am glad to have the opportunity to again reassure the Seanad on this matter. I should make it clear to the House that the intent was always that an existing regulated financial service provider authorised to provide credit and already undertaking credit servicing would not be required to apply for additional authorisation as a credit servicing firm. These firms have already been through the authorisation process and we do not want to impost an additional regulatory burden on them. We are proposing in these provisions that such firms be deemed or taken to be authorised as credit-servicing firms, rather than being excluded from the definition of credit-servicing firms. This ensures that firms servicing credit, whether newly authorised or taken to be authorised, will be treated equally in respect of that activity. In addition, if the Central Bank wishes to impose conditions on credit-servicing firms, there will be a single cohort available to it. The model which currently operates for regulation by the Central Bank is that a single entity is responsible and answerable to the bank for actions it undertakes or that are undertaken on its behalf. This model works well and there is, therefore, no reason to change it, with the single exception of the need to address those loan books which are sold.

If a firm is undertaking credit servicing solely or exclusively for a firm which is already regulated, such as a bank based in Ireland, then it does not need to be regulated itself. It is the regulated firm that is answerable to the Central Bank for any actions it takes or that are undertaken on its behalf. The regulated financial service provider must ensure that firms undertaking services on its behalf follow all relevant regulations. It is likely that firms which are servicing credit exclusively for a regulated firm and therefore do not need to be regulated may none the less decide to seek Central Bank authorisation, possibly in order to expand their customer base. I hope my response has reassured Members in respect of Government thinking on this matter.