Dáil Éireann Debate, Tuesday - 17 June 2014
161. Deputy Pearse Doherty asked the Minister for Finance if the buyers of commercial loan books at Irish Bank Resolution Corporation have agreed to abide by the relevant code of conduct on business borrower-lender relationships; and the legal status of these codes. [25510/14]
View answerI have been advised by the Special Liquidators that the relevant code of conduct that can apply to certain "business borrower-lender relationships" is the Code of Conduct for Business Lending to Small and Medium Enterprises (SME Code). The application of the SME Code varies depending on whether the relevant purchasing entity of the commercial loans is a regulated entity or an unregulated entity. If the purchasing entity is a regulated entity it is required to comply with the SME Code. If the purchasing entity is not a regulated entity it is not required to comply with the SME Code.
I have been informed by the Special Liquidators that, unlike consumer lending, business lending is not an activity which, in and of itself, must be undertaken by a regulated entity (i.e. an unregulated entity could be established for the sole purpose of lending to SMEs and this would not require authorisation, and would not be subject to such codes).
I am advised by the Special Liquidators that they have not sought agreement from buyers of commercial loan books to comply with code of conducts on "business borrower-lender relationships" as compliance with the relevant Code of Conducts is a matter for the Central Bank of Ireland.
