Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I thank Senator Darragh O'Brien for his contribution today and all Senators for their contributions on Second and Committee Stage. I apologise for not being here for the early Stages of the Bill. On account of the situation in Greece, over a ten-day period we have had Eurogroup meetings outside the country, one in Luxembourg and four in Brussels, as well as two full teleconferences. The seven meetings in one form or another have thrown the schedule and the plans I had for processing legislation in the Seanad. I am glad the Ministers of State, Deputy Simon Harris and Deputy Dara Murphy, were able to attend.

The background to this legislation is that the Central Bank had protocols and regulations in place as to how lending agencies should treat people with mortgages and loans, which applied to any institution that was licensed by the Central Bank, but developments in the market resulted in a situation, affecting 14,000 or 15,000 mortgage holders to date, in which loan books were acquired by non-regulated institutions. The first step was that we got the non-regulated institutions to voluntarily comply with the Central Bank's protocols and regulations. As far as I know, they honoured the commitment to apply these protocols voluntarily, but we thought it would be prudent to legislate. The legislation seeks to apply the same regulatory regime and the same code of practice to the new owners of loan books and to the acquisition of loan books so that all mortgage holders are treated equally. When we examined it first we thought that if we simply widened the scope of what the Central Bank was doing to include unregulated owners as well as regulated owners, that would meet the requirements. As we scrutinised it, however, we found that the practice for new owners of loan books was quite frequently to hire a credit servicing firm, which would then act as an interface with mortgage holders, so there was not much point in regulating the owner when it was the credit servicing firms' procedures and practices that needed to be regulated. That is why the focus is on the credit servicing firms but it does capture the owners as well. If an owner acts as his own credit servicing firm or if he is in and out of it and not fully at arm's length, then he is caught by the provisions of this as well. Therefore, it does capture owners that are intermittently involved in the practices we want to control under the Bill.

My advice and the advice from the Attorney General is that the legislation does what it says on the tin. It extends the Central Bank's regulation and its protocols and codes of practice to all loan books that are sold on at the point where it is relevant with the agencies that relate to them. I will take Senators' views into account and monitor the Bill. Principally, it is a job for the Central Bank. We have good relationships with the Central Bank and we will monitor what happens in practice. If there is any lacuna that has not been brought to my attention we will fix it. The intention is that, whether or not an institution falls within the scope of the Central Bank's regulation, its treatment of mortgage holders has to be in line with the Central Bank's protocol, and this now is a matter of law. That is the position and I am assured this is what the legislation does. I take the Senator's point. It is always worth keeping an eye on things. If the Senator comes across an instance such as that mentioned, I would appreciate it if he would send us the details.