Pearse Doherty (Donegal, Sinn Fein)
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54. To ask the Minister for Finance when, as per the programme for Government, he will move to provide greater protection for mortgage holders, tenants and SMEs, whose loans have been transferred to non-regulated entities, that is, vulture funds; and if he will make a statement on the matter. [17538/16]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware, the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 was enacted on 8 July 2015. It was introduced to fill the consumer protection gap where loans were sold by the original lender to an unregulated entity. The 2015 Act introduced a regulatory regime for a new type of entity called a 'credit servicing firm'.  Credit Servicing Firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'. This ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes, such as the Consumer Protection Code, the Code of Conduct on Mortgage Arrears and the Code of Conduct for Business Lending to Small and Medium Enterprises.

The Central Bank is now the competent authority for the authorisation and supervision of credit servicing firms. Credit servicing firms must comply with all relevant requirements of financial services legislation, including the various codes mentioned already and Fitness and Probity Standards (including minimum competency requirements).

In addition to compliance with Central Bank codes of conduct, credit servicing firms will have to demonstrate to the Central Bank that they have:

- Robust governance and adequate resources to ensure compliance;

- Agreements with loan owners that enable the credit servicing firm to fully comply with its obligations under Irish financial services legislation; and

- Adequate and effective control of loan servicing in the State to enable Central Bank oversight.

New owners must either become regulated as credit servicing firms themselves or use a regulated credit servicing firm to service their loans. My Department will continue to keep all relevant legislation under review in order to ensure that borrowers whose loans have been sold to non-regulated entities are properly protected and do not lose any protections which they previously enjoyed.