Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

62. To ask the Minister for Finance the legislative and regulatory steps he will take to ensure that the owners of mortgage credit are fully regulated as opposed to the credit servicers; and if he will make a statement on the matter. [1734/17]

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

293. To ask the Minister for Finance the proposals he is currently considering to ensure mortgage holders, tenants and SMEs that have loans or credit from non-bank lenders or vulture funds are fully protected; if he is considering extending the provisions of the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 in this regard; and if he will make a statement on the matter. [1668/17]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 62 and 293 together.

As the Deputy will be aware, I have taken steps to ensure that borrowers whose loans are sold retain the same protections which they had prior to the sale. This was effected through the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015. It was introduced to fill the consumer protection gap where loans were sold by the original lender to an unregulated firm. The 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'.

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. The significant point is that we regulated at the point of contact with the customer. Therefore 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, Code of Conduct on Mortgage Arrears) 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 in July 2016. It is also important to highlight 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 original contract.

In addition, to further enhance the protection of borrowers, the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 ensures that a regulated credit servicing firm cannot do something, or fail to do something, which would be a prescribed contravention if performed, or not performed, by a retail credit firm. The legislation also prevents the owner of credit from instructing a regulated credit servicing firm to perform such an action.  Therefore the borrower is protected because the owner cannot give an instruction that would breach the rules but also the instruction cannot be implemented by the regulated credit servicer, over whom the Central Bank has oversight as a regulated entity. 

Nonetheless, my Department will continue to keep all relevant legislation under review in order to ensure that borrowers whose loans have been sold are properly protected and do not lose any protections which they previously enjoyed. In addition, the Department of Finance 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.

In relation to tenants, landlord-tenant relations are governed by multiple pieces of legislation (mainly under the aegis of my colleague, the Minister for the Housing, Planning, Community and Local Government). The landlord/owner of the property is restricted in what they can do in relation to removal of tenants from a property. These restrictions are the same whether the landlord bought the property, built the property themselves, became a landlord as a result of renting out what was formerly a principal dwelling house or acquired the property by other means such as enforcing loans secured on the property.

Tommy Broughan (Dublin Bay North, Independent)
Link to this: Individually | In context | Oireachtas source

63. To ask the Minister for Finance if he has made a complaint to the Garda Bureau of Fraud Investigation, the Director of Corporate Enforcement, the Central Bank and other relevant agencies regarding the alleged illegal transfer of mortgage payers from tracker to variable interest rate mortgages; the actions he has taken in this regard; and if he will make a statement on the matter. [1494/17]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Central Bank is responsible for the regulation and supervision of financial service providers and for protecting the consumer of financial services.  As the Deputy is aware, the Central Bank has commenced an industry wide examination of tracker mortgage related issues covering among other things transparency of communications with and contractual rights of tracker mortgage customers. The Examination is a key priority for the Central Bank and it continues to challenge lenders to ensure that progress is being made and fair outcomes are being achieved for customers.

I am informed by the Central Bank that while the Bank cannot comment on the specific details of the ongoing tracker mortgage examination or any enforcement investigations relating to this matter, in November 2016, it issued a reprimand and imposed a fine of €4.5m on Springboard Mortgages Limited in respect of serious failings in its obligations to tracker mortgage customer.  The Central Bank has statutory reporting obligations to the Garda Síochána, and other agencies, where it suspects a criminal offence may have been committed by a supervised entity. The Central Bank takes these obligations very seriously and complies with them on an on-going basis as appropriate.