Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 58 and 59 together.

The Code of Practice on the Transfer of Mortgages (the Code of Practice) was issued by the Central Bank of Ireland in 1991 to institutions involved in mortgage credit. It may be applied on a voluntary basis by any institution involved in mortgage credit. 

The Code of Practice applies to a loan secured by the mortgage of a residential property.  For the purposes of this Code of Practice, a residential property is not limited to a principal private residence. 

This Code of Practice remains in place, but as it is a voluntary code, it does not have a legislative basis and is not subject to the Central Bank of Ireland’s administrative sanctions process.  In relation to written consent being given when the mortgage contract is signed, the Central Bank has informed me that it cannot comment on individual mortgage contract terms.

The Central Bank’s Consumer Protection Code 2012 (the Code) is a statutory Code which must be complied with by all regulated financial services providers providing financial services within the State.  This Code requires that, where a regulated lender intends to transfer all or part of its loan book, it must provide advance notification to both the Central Bank and affected consumers.  I would draw Deputies' attention to Provision 3.11 of the Code which states:  “Where a regulated entity intends to cease operating, merge with another, or to transfer all or part of its regulated activities to another regulated entity it must: a) notify the Central Bank immediately; b) provide at least two months notice to affected consumers to enable them to make alternative arrangements; c) ensure all outstanding business is properly completed prior to the transfer, merger or cessation of operations or, alternatively in the case of a transfer or merger, inform the consumer of how continuity of service will be provided following the transfer or merger; and d) in the case of a merger or transfer of regulated activities, inform the consumer that their details are being transferred to the other regulated entity, if that is the case.” Where the transferee is an unregulated entity, the Code requires that the regulated lender also notify the consumer of the regulated entity that will be ‘servicing’ the loan for the unregulated entity.

In addition, the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 ensures that borrowers whose loans are transferred retain the same protections which they had prior to the transfer, including protections under the Code of Conduct on Mortgage Arrears and the Consumer Protection Code. I do not have to remind the Deputy of his own Private Member's bill which will require the regulation of loan owners. Therefore I do not have any plans to put the Code onto a statutory footing at present.