Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

I thank Deputy Michael McGrath for the work he has done on the Bill. The Government welcomed the Bill and committed to working with Deputy McGrath, who initiated it in the Dáil, to make it more effective than it was when it started out. The Bill is quite short but it is very technical. The principle behind the Bill is that loan owners who purchase loan books will require authorisation from the Central Bank and will be regulated by the Central Bank. The bank will be able to impose sanctions on loan owners who breach its codes of conduct. The Bill allows securitisation to continue to take place. We accept that securitisation plays an important role in the financial services landscape and we consider that a passive securitisation vehicle does not have any consumer protection implications.

The Bill was considered in great detail on Committee Stage in the Dáil. A number of amendments were made on Report Stage to reflect these discussions and further consultations with the Central Bank. Prior to Committee Stage, there was not full agreement on whether the credit servicing regime or the retail credit firm regime was the most appropriate structure but I am glad to note that officials of the Department and the Central Bank were able to resolve their issues when the draft legislation was examined in detail.

We now have a relatively short Bill of just three sections. The first section amends a number of definitions in the Central Bank Act 1997, which will have the effect of making the following activities subject to Central Bank regulation: holding the legal title to credit granted under the credit agreement, determination of the overall strategy for the management and administration of a portfolio of credit agreements and maintenance of control over key decisions relating to such portfolios. The second section has transitional provisions in place that mean the transitional authorisation only applies to the newly-regulated activities, requires the owner to seek authorisation from the Central Bank within three months and only applies as long as the other activities are undertaken by a regulated credit servicing firm. The third section is the standard section on commencement and Short Title.

I wish to be clear that it is the intention of myself and the Minister, Deputy Donohoe, that the Bill will be commenced as soon as possible after enactment.