Bernard Durkan (Kildare North, Fine Gael)
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13. To ask the Minister for Finance if the Central Bank will take particular steps to soften the manner in which original or secondary lenders treat home borrowers (details supplied); and if he will make a statement on the matter. [23571/17]

Michael Noonan (Limerick City, Fine Gael)
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Within the remit of the Central Bank’s responsibilities for safeguarding stability and protecting consumers, its approach to mortgage arrears resolution is focused on ensuring the fair treatment of borrowers through a strong consumer protection framework and ensuring that lenders have appropriate arrears resolution strategies and operations in place. 

The Code of Conduct on Mortgage Arrears is a key part of the Central Bank’s Consumer Protection Framework in this regard.  Banks, retail credit firms and credit servicing firms servicing loans on behalf of unregulated loan owners are all required to comply with the CCMA.  The overriding objective of the CCMA is to ensure the fair and transparent treatment of consumers in mortgage arrears or pre-arrears, and that due regard is had to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits. 

Last year I wrote to the Governor of the Central Bank to request that an assessment be undertaken of the range of available sustainable restructure solutions offered by banks and non-bank entities.  The Central Bank completed its assessment and their report is published on the Department of Finance website.  The assessment finds a comprehensive range of available restructuring solutions being offered and delivered by both bank and non-bank entities and notes considerable progress in addressing mortgage arrears since the peak.  The Central Bank notes further that  there is strong evidence that both banks and non-banks look to exhaust available restructure options before moving to the legal process.  In addition, the Central Bank considers the range of restructures offered by banks to be broadly appropriate in balancing consumer protection imperatives, and maintaining a mortgage market for all borrowers, and a functioning banking system.

In referring to “secondary lenders”, the Deputy may be talking about funds to whom loans are sold. He will be aware that the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 was enacted in July 2015. It was introduced by the previous Government 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 that 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 various statutory codes (such as the Consumer Protection Code, and the Code of Conduct on Mortgage Arrears).  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.

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 that they previously enjoyed. In addition, 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.

Tommy Broughan (Dublin Bay North, Independent)
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14. To ask the Minister for Finance if section 33AT (1) of Part IIIC of the Central Bank Act 1942 has been amended in subsequent finance legislation; if not, his plans to amend or remove that specific section which related to sanctions for criminal offences; and if he will make a statement on the matter. [23367/17]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank’s Administrative Sanctions Procedure is governed by Part IIIC of the Central Bank Act 1942. Part IIIC was inserted into the Central Bank Act, 1942, by the Central Bank and Financial Services Authority of Ireland Act, 2004. It provides the Central Bank with the power to administer sanctions in respect of the commission of prescribed contraventions by regulated financial service providers and by persons presently or formerly concerned in their management.

Section 33AT (1) of Part IIIC provides that no criminal prosecution may be brought against a financial service provider or person concerned in the management of a financial service provider, if the prescribed contravention in question has already been the subject of an Inquiry under the Administrative Sanctions Procedure which led to the imposition of a monetary penalty.

Section 33AT (2) provides that where a criminal prosecution has been brought in respect of an offence that also involves a prescribed contravention, and the regulated entity or person is found either guilty or not guilty, then no monetary penalty may be imposed pursuant to the Administrative Sanctions Procedure.

In circumstances where both the Administrative Sanctions Procedure and summary criminal prosecution are available, the Central Bank will consider the circumstances of each case on its merits before deciding which avenue to pursue. Furthermore, in deciding whether or not to pursue criminal proceedings, the Central Bank will have regard to the Director of Public Prosecution’s “Guidelines for Prosecutors”.

Section 33AT does not preclude the Central Bank from following other non-monetary avenues within the Administrative Sanctions Procedure, including issuing a caution or reprimand, a direction ordering the financial service provider or person to cease participating in the commission of the contravention, or the suspension or revocation of regulatory authorisation. Neither does it absolve the Bank from the obligation to refer the matter to the relevant authority, including An Garda Siochana, where appropriate.

Section 33AT upholds the principle of ne bis in idem, also known as double jeopardy, which is deemed a constitutional and procedural right, and which provides that a person cannot be prosecuted more than once for the same offence.  Accordingly, I have no plans to amend or remove this specific provision.