Dáil Éireann Debate, Wednesday - 18 October 2006
146 Ms Shortall asked the Minister for Finance the plans he has to extend the remit of the IFSRA or the Central Bank to regulate companies which advance money from their own resources secured on assets such as property; the number of money lending companies which currently operate as unauthorised and unregulated credit institutions; and if he will make a statement on the matter. [33099/06]
View answerIn general, non-deposit taking lenders are not currently subject to authorisation or prudential supervision by the Financial Regulator. However, the question of the appropriate regulation and supervision of non-deposit taking mortgage lenders is currently under examination in consultation with the Financial Regulator.
As the Deputy may be aware, consumer credit including hire purchase and consumer hire, together with moneylending and home loans, are governed by the Consumer Credit Act 1995, which sets out important consumer protection measures, including the form and content of the credit agreements in respect of those types of loans.
In the case of home loans, i.e. loans in respect of or secured on a person's principal private residence, Part IX of the Consumer Credit Act imposes significant consumer protection obligations. These include: provision of a written loan agreement, quoting the APR and any other fees that will be charged, a requirement to warn the borrower about the risk of losing their home, and an obligation to put mortgage protection insurance in place. The Financial Regulator's new Consumer Protection Code applies to the sale of these loans by mortgage intermediaries — the usual vehicle for such transactions. Under the Act, the Financial Regulator may also give directions to a mortgage lender in relation to misleading advertising.
Under the legislation establishing the Financial Regulator, the Regulator's Consumer Director has powers and responsibility for monitoring the provision of financial services to consumers generally. These powers are additional to the Director's powers of investigation, enforcement and prosecution set out in the Consumer Credit Act 1995. Complaints in relation to the matters governed by the Consumer Credit Act may be dealt with by the Financial Services Ombudsman.
As non-deposit taking lenders are not regulated, my Department does not hold any information as to how many such lenders are currently operating in the market.
