Bernard Durkan (Kildare North, Fine Gael)
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46. To ask the Minister for Finance the extent to which adequate controls exist to ensure unregulated third parties purchasing loan books from financial institutions are not allowed to ignore the individual family circumstances in the course of the pursuit of mortgage arrears, with particular reference to the likelihood of an exacerbation of an already serious housing crisis, in view of the fact there is no obligation for such venture capitalists to disclose their profits in individual cases; and if he will make a statement on the matter. [41582/16]

Bernard Durkan (Kildare North, Fine Gael)
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338. To ask the Minister for Finance if he and his Department continue to monitor the activities of unregulated third parties that have purchased distressed loans, with a view to ensuring such institutions treat borrowers with due consideration for their circumstances and that the option of repossession is restricted whereby the borrowers continue to meet payments to the best of their ability and in line with their circumstances, thereby avoiding an exacerbation of the homeless situation; and if he will make a statement on the matter. [1960/17]

Bernard Durkan (Kildare North, Fine Gael)
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340. To ask the Minister for Finance the extent to which unregulated third parties continue to accommodate borrowers whose loans have been sold off by the original lender; and if he will make a statement on the matter. [1962/17]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 46, 338 and 340 together.

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 firm. It introduced a regulatory regime for a new type of entity called a 'credit servicing firm' and such firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'.

Under the Act, purchasers of loan books must either be regulated by the Central Bank themselves or else the loans must be serviced by a credit servicing firm who is regulated by the Central Bank.  Relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the Consumer Protection Code and the Code of Conduct on Mortgage Arrears (the CCMA) issued by the Central Bank of Ireland and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 which came into operation on 1 July 2016. The CCMA already provides protections to borrowers in difficulties. Lenders may only commence legal proceedings for repossession of the borrower's primary residence after it follows a number of steps.  The steps include:

- Making every reasonable effort under the CCMA to agree an alternative restructure arrangement (ARA) with the borrower;

- time bound requirements to inform the borrower the regulated entity is not willing to offer an ARA and of his/her options;

- time bound requirements to inform a borrower, who is not willing to enter into an ARA, of his/her options; and

- a decision to classify the borrower as non-cooperating. 

I am informed by the Central Bank that there is a broad range of available restructures offered and delivered by both bank and non-bank entities and there is strong evidence that both banks and non-banks look to exhaust available restructure options before moving to the legal process.

I expect that the Central Bank, as regulator of credit servicing firms, will be vigilant in this area and raise any specific instances where they have found consumers have not had their protections upheld or that their positions have been disadvantaged. My Department will also keep the situation under review to ensure that protections stay in place and that there are no gaps in protection.