Robert Troy (Longford-Westmeath, Fianna Fail)
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235. To ask the Minister for Finance if he will urgently investigate the circumstances in which a financial institution (details supplied) is continuing to sell mortgages on to third-party mortgage brokers, particularly in cases where a mortgage has never been in arrears and is fully serviced. [14707/23]

Michael McGrath (Cork South Central, Fianna Fail)
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As the Deputy will be aware, as Minister for Finance I cannot prevent loan sales that are made by banks to meet regulatory obligations, even by the banks in which the State has a shareholding. These decisions are the responsibility of the board and management of the banks which must be run on an independent and commercial basis. The banks’ independence is protected by Relationship Frameworks which are legally binding documents which I, as Minister, cannot change unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.

The PTSB Relationship Framework can be found at the following link:

www.finance.gov.ie/wp-content/uploads/2017/07/PTSB-Relationship-Framework-April-2015.pdf.

I wish to highlight that that the protections for borrowers in place before the sale remain unchanged. When dealing with borrowers, retail credit firms are bound by the same regulations that currently apply to PTSB. Like PTSB, they are required to comply with the Consumer Protection Code (CPC) and the Code of Conduct for Mortgage Arrears (CCMA) when dealing with borrowers who are in arrears. In this regard, it is important to note that there are no changes to the rights of a borrower whose loan is sold by a bank. All terms and conditions attached to their mortgage contract remain in place. In addition, the purchaser of the PTSB loan book, is a retail credit firm regulated by the Central Bank of Ireland.

The Central Bank has advised that it does not comment on the commercial decisions of banks. However it has indicated that its focus is on ensuring continued progress by the banks on sustainable distressed debt resolution, through the multiple tools available.

This includes restructuring activity undertaken by the banks via the proactive engagement (by banks) with distressed borrowers on the implementation of suitable alternative repayment arrangements. The Central Bank notes that it expects that this is the primary method by which banks resolve distressed debt, however, the Central Bank also notes that this is one of a number of distressed debt resolution tools including accounting write downs, mortgage to rent, engaging through the Insolvency Service, sales and securitisations and the legal process.