Michael McCarthy (Cork South West, Labour)
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293. To ask the Minister for Finance if he will provide a breakdown of the number of residential mortgages currently held by entities not regulated by the Central Bank of Ireland; the protections available to mortgages, having been sold to unregulated entities such as a company (details supplied); the actions he will take to make sure such Irish mortgage holders are not paying uncompetitive and unfairly high interest rates on their mortgages; and if he will make a statement on the matter. [20302/15]

Michael Noonan (Limerick City, Fine Gael)
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Recent Central Bank research published in the Quarterly Bulletin this April gave a total number of PDH mortgage accounts with all lenders of 758,988. It showed a total of 42,169 accounts with non-bank lenders which includes both regulated retail credit firms and currently unregulated entities.

At present, the particular referenced firm is not regulated by the Central Bank. Unregulated entities that have acquired mortgage loan books are not subject to regulation by the Central Bank and are therefore not subject to the provisions of its Codes, such as the CCMA - though many such firms have stated that they will voluntarily comply with the CCMA.

However, borrowers whose loans are sold to unregulated entities will be protected by the Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015 when it is enacted.  The purpose of the Bill is to ensure that consumers retain the protections they had prior to the sale of their loan.  This Bill will require entities dealing with the consumer to be authorised by the Central Bank and subject to its Codes of Conduct. Dealing with the consumer is credit servicing and the definition of credit servicing is broad. Owners of loan books who deal directly with consumers, that is, who are servicing their own loan books, will be regulated. Otherwise they can have the loan book serviced by a regulated credit servicing firm.

The Bill was published in January and Second Stage of the Bill was taken in the Dáil on 4 February. Since then, my officials have been in contact with the Central Bank and with the Office of the Attorney General to further progress the legislation. The Bill will continue its progress through the legislative process and I look forward to further discussion of the Bill on Committee Stage which has been set for tomorrow (27 May).

In relation to interest rates, last week I concluded a constructive series of meetings with senior management of Ireland's six main mortgage lenders.

The purpose of these meetings was to discuss the mortgage market in general and specifically to raise the issue of standard variable mortgage rates charged by the six main lenders. I outlined my view, that Standard Variable Rates being charged in the Irish market are too high. There was agreement from all lenders that customers should have access to more competitive mortgage products as per my recommendation. The banks agreed to review their rates and products and, by the beginning of July, to have simple options to reduce monthly mortgage payments for SVR customers. Some of the potential products include lower standard variable rates for existing and new customers, competitive fixed rate products and lower variable rates taking account of loan to value for new and existing customers. In addition to the issue of rates I also outlined the need for greater competition in the market and the need for a more active and well-resourced campaign by the individual banks. This should focus on promoting awareness of their best offering and how easy it is for customers to take up new products and switch between different institutions if they wish to avail of better rates. The position of home owners who are in negative equity was also discussed and assurances were sought and received that these homeowners will be able to avail of options to reduce their monthly repayments. Officials in my Department will review progress over the coming weeks and a follow up set of meetings with each of the six banks will take place in September in advance of the Budget.