Written answers

Tuesday, 9 November 2021

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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258. To ask the Minister for Finance his views on whether in the context of a bank exiting the Irish market and selling its loan book that in the case of any family home mortgage being sold on to a third-party at a discount on the mortgage, for example, a tracker mortgage, that the discount be offered in the first instance to the mortgage holder who may be in a position to buy out their mortgage; and if he will make a statement on the matter. [54634/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The sale of a loan book and the price transacted between regulated entities in relation to any such sale is a commercial matter for the business entities involved in that particular transaction.

However, the Central Bank has advised that there are certain requirements which must be met by regulated entities in circumstances where an entity is withdrawing from the Irish market. In particular, the withdrawal must be undertaken in accordance with the provisions of Irish financial services legislation, including the Central Bank’s codes of conduct, specifically, provision 3.11 of the Consumer Protection Code 2012.

Under Provision 3.11 of the Code, a regulated firm that intends to cease operating, merge with another, or to transfer all or part of its regulated activities to another regulated firm, must:

- provide affected consumers with at least two months’ notice to enable them to make alternative arrangements if they so wish;

- ensure all outstanding business is properly completed prior to any transfer, merger or cessation of operations; or, in the case of a transfer or merger, inform customers as to how continuity of service will be provided following a transfer or merger; and

- in the case of a merger or transfer of regulated activities, inform customers that their details are being transferred to the other regulated entity, if that is the case.

In relation to loans, where they are sold or transferred to another regulated entity, the consumer protections in place for borrowers will not change. Also the terms and conditions of a customer’s mortgage or other credit agreement remain in place following a loan sale/transfer. It is worth noting that, under the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018, if a loan is transferred or sold, the holder of the legal title to the credit must be regulated and must act in accordance with Irish financial services law that applies to ‘regulated financial service providers’. This ensures that consumers whose loans are sold or transferred, maintain the same regulatory protections that they had, including under the various Central Bank statutory codes of conduct such as the Consumer Protection Code 2012 and the Code of Conduct on Mortgage Arrears 2013 (CCMA).

The Central Bank has also advised that its supervision of any bank that withdraws from the market will be focused on ensuring that its customers are treated fairly, and remains in compliance with the letter and spirit of regulatory requirements. The Central Bank has clearly communicated the requirement for a customer-focused approach to be taken in all aspects of their business throughout the period of change and that they ensure that customers understand what the withdrawal means for them.

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