Robert Troy (Longford-Westmeath, Fianna Fail)
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261. To ask the Minister for Finance his views regarding the serious consequences for loan owners who have had their loans sold by financial institutions to venture funds (details supplied); the regulations in place to ensure venture capitalists cannot exploit performing loans; and if he will make a statement on the matter. [28364/15]

Michael Noonan (Limerick City, Fine Gael)
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I am pleased to inform Deputies that borrowers whose loans are sold to unregulated entities are now protected by the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 which has just been enacted.  The purpose of the Act is to ensure that consumers retain the protections they had prior to the sale of their loan.  This Act 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.

All consumer and relevant SME loans sold by regulated financial institutions will be covered by this Act. Borrowers will therefore be restored to the protections they previously had, such as the Code of Conduct on Mortgage Arrears (CCMA), the Consumer Protection Code and the Code of Conduct for Business Lending to Small and Medium Enterprises. Borrowers who previously had access to the Financial Services Ombudsman will also have this right restored by this legislation.

In addition, it should be noted 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. If a borrower considers that an attempt to change the terms of the contract unilaterally is being made, they should consider seeking independent legal advice. In addition or alternatively, they could make a complaint to the regulated lender or credit servicing firm as appropriate and progress to the Financial Services Ombudsman if the complaint is not resolved to their satisfaction.