Michael McGrath (Cork South Central, Fianna Fail)
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253. To ask the Minister for Finance the number of mortgages on principal private dwelling houses held by the lenders who are no longer active here; the number of these that are in arrears; in negative equity; the measures being taken to protect these borrowers from interest rate rises, as these lenders are not subject to the discipline of the new mortgage market; and if he will make a statement on the matter. [24912/15]

Michael Noonan (Limerick City, Fine Gael)
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Firstly, it is important to note that a lender regulated by the Central Bank of Ireland who is no longer providing new mortgage loans is still required to comply with the relevant provisions of Irish financial services legislation in relation to their existing loan book. This includes the Code of Conduct on Mortgage Arrears (CCMA).

As the Deputy will be aware, 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. The Bill is continuing its progress through the legislative process. The Bill was passed by the Dáil on 17 June and I look forward to further discussion of the Bill at Second Stage in the Seanad tomorrow (24 June).

In addition, I need to be clear that the transfer of a loan from one entity to another does not change the terms of the contract or the borrower's rights and obligations under the contract.

I should say that the Central Bank does not have specific data on banks which no longer operate in the country as opposed to non-bank lenders.

According to the Central Bank's Statistical Release of 4 June 2015, by the end of March 2015, non-bank entities accounted for 5.1 per cent of all outstanding mortgage loans (6.3 per cent in value terms).

The Release noted that non-bank lenders now hold almost 46,000 mortgage accounts for principal dwelling houses (PDH) and buy-to-let (BTL) combined. Of this number, 19,818, are in arrears on more than 90 days.

In addition, the ESRI in its recent Quarterly Economic Commentary has noted that the number of households in negative equity is falling.

In relation to interest rates, as the Deputy will be aware, I met with senior management of Ireland's six main mortgage providers in May and 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.

In addition, I 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 customers can take up new products and switch between different institutions if they wish to avail of better rates.