Gerry Horkan (Fianna Fail) | Oireachtas source

This is a Fianna Fáil Bill. I welcome that we discussed it last week. I can see why somebody might table these amendments and it is quite emotive with Permanent TSB and so on. These amendments are trying to remove the sections relating to passive securitisation where the ultimate investor plays no role in the administration of the loan used in that model. The bank uses the model for good loans and the investor is simply looking for the cashflow from those loans. The bank will continue to hold the legal title in most cases and will continue to administer the loans. For the purposes of this legislation, the lender will be regulated and not the passive investor.

Amendment No. 1 removes the definition of a securitisation special purpose entity. That definition is there to legislate for passive securitisation. It is important, if the passive investor starts to become active, that he or she is covered by the Bill. It is important that we realise that if banks do not reduce their non-performing loans, NPLs, to the ratios being looked for by the European Central Bank, ECB, the Single Supervisory Mechanism, SSM, and so on, then they will not be in a position to lend to the economy. That is an unintended consequence as far as I am concerned in that they have too many NPLs on their books. I might not agree with the definition of NPL but it is there and is what they have to stick to. People are sticking to a restructured agreement but do not qualify as having a performing loan because of the definition of NPLs. A high level of NPLs restricts the ability of banks to lend to the wider economy, to small businesses, to people buying homes and to people trying to improve their lives through borrowing in a sensible and measured way. If the passive investor decides to make key decisions, then he or she is no longer passive and is covered by the Bill. This is used extensively by many banks in Ireland. Approximately a quarter of the European securitisation market is in Ireland, with over 1,000 staff working in this industry. I am concerned that these amendments would have that effect. The Minister outlined that there are some drafting errors in how the amendments are worded. There is an idea that everybody who has already been regulated and certified would have to reapply and re-administer what they are already doing. They are regulated and will be regulated by this Bill. It is important that this Bill passes as quickly as possible.I take on board the concerns of the party that has proposed the amendments. As a member of the party that brought the Bill forward, it is a step in the right direction, as Senator Conway-Walsh has acknowledged. The sooner we get this done, the better. If and when this happens, how soon can we get it to take effect? When will it come into operation? Passive securitisation is not covered but anything involving active participation is covered. All of the credit servicing firms will be covered. The people who owe money to the institutions will be covered. All the people they are dealing with will be covered by the Bill.

I ask Sinn Féin not to press the amendments because I would like the Bill to be enacted as soon as possible for the benefit of everybody dealing with credit servicing firms in Ireland.