Noel Grealish (Galway West, Independent)
Link to this: Individually | In context | Oireachtas source

95. To ask the Minister for Finance his views on the anomaly in consumer protection law whereby financial institutions in dispute with their customers can appoint receivers to dwelling houses, whether private houses or buy to let, while a dispute is with the Financial Services Ombudsman for formal investigation and adjudication; his plans to amend the law in this regard; and if he will make a statement on the matter. [10516/17]

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

The role of the Financial Services Ombudsman (FSO) is to independently and impartially investigate and resolve disputes between consumers and regulated financial service providers.

When a complaint is made by a Consumer to the FSO, every effort is made by the Ombudsman to facilitate the parties in achieving a mediated settlement. If no settlement is achieved, the matter will proceed to a more formal investigation and ultimately to adjudication, and the parties will be issued with a legally binding Finding.

If a complaint is received, arising from a situation of arrears on a borrowing, the FSO will consider the protections afforded to borrowers and mortgage holders by the Central Bank of Ireland's Code of Conduct on Mortgage Arrears (CCMA) and the Consumer Protection Code (CPC). In addition, if a Receiver is appointed by the lender, either before a complaint is made to the FSO, or after the FSO has begun dealing with the matter, the appointment of the Receiver will not impede the mediation, investigation or adjudication of the complaint by the FSO.

In that event, the FSO will investigate whether the mortgage deed in place, permitted the appointment of a Receiver, and secondly whether it was reasonable and fair for the lender, at the particular point in time, and in the overall circumstances, to proceed with the appointment of a Receiver.

If the Financial Services Ombudsman upholds the complaint and takes the view that it was wrongful of the lender to have appointed a Receiver, the Ombudsman can direct compensation of up to €250,000 and/or direct such rectification as considered to be appropriate in the circumstances.

In these circumstances, I consider that the FSO has sufficient powers to provide the appropriate remedy where he has found a complaint to be wholly or partially substantiated. 

As the Deputy may be aware, the Financial Services and Pensions Ombudsman Bill is a priority Bill for the Government and the heads of Bill underwent pre-legislative scrutiny on 27th October of 2016 and the consequent report of the Oireachtas Committee is awaited.  In the meanwhile, officials in my Department are working with officials in the Office of Parliamentary Council to finalise a draft text of the Bill. It is a fairly lengthy Bill with nearly 60 heads to be drafted coupled with the complexity of amalgamating two different complaints systems. However, it is hoped that the Bill will be published in the coming months.

The parts of the Financial Services and Pensions Ombudsman Bill dealing with the FSO powers of rectification and compensation are broadly similar to the powers he currently enjoys.