Dáil Éireann Debate, Tuesday - 25 March 2014
206. Deputy Brendan Griffin asked the Minister for Finance if he will ensure that the mortgage code of conduct will be applied to any mortgages that are bought by international banks; and if he will make a statement on the matter. [13092/14]
View answerWhere regulated financial institutions sell part, or all, of their mortgage book to another regulated financial institution, the same protections apply to borrowers, namely, the Central Bank's Code of Conduct on Mortgage Arrears and the Consumer Protection Code. Where a regulated financial institution outsources part, or all, of their mortgage book, the same protections apply to borrowers and the institutions have responsibility for ensuring that these protections are applied by the outsourced company. Where a regulated financial institution sells part, or all, of a mortgage book to an unregulated institution, then the borrower will not be afforded the same level of protections. In their case, the conditions of the original contract will apply.
The Deputy may be aware that, following the meeting of the Finance and Public Expenditure and Reform Committee on 26 February 2014, the remaining bidders for the IBRC loan books committed, on a voluntary basis, to abide by the Central Bank's Code of Conduct on Mortgage Arrears. This is similar to the commitment given by Apollo which is not a regulated entity. No specific difficulties have been raised about the ongoing operations of Apollo.
As the Deputy may also be aware, the House recently debated a Fianna Fáil Private Members' Bill entitled 'Protection of Residential Mortgage Account Holders Bill 2014'. The Government did not oppose the Bill and committed to working with Deputy Michael McGrath and the other members of the Finance and Public Expenditure and Reform Committee to achieve the best solution for consumers.
The 'Sale of Loan Books to Unregulated Third Parties Bill', which is listed on the Government Legislative Programme, was always intended to address concerns surrounding the continued applicability of the Code of Conduct on Mortgage Arrears following the sale of loan books to unregulated entities. My officials are already examining the complexities of this issue with their colleagues in the Central Bank and in the Attorney General's office.
As I have indicated previously, this is a complex issue. Therefore I am not in a position to say when the draft legislation will be ready for submission to Government. I do not want to bring forward unworkable legislation or legislation that has unintended consequences for mortgage holders.
