Dáil Éireann Debate, Tuesday - 23 June 2015
111. Deputy Thomas Pringle asked the Minister for Finance the retrospective nature of the Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015; if the Bill will cover current ongoing situations, involving borrowers receiving warnings from banks in relation to their loans, including mortgages; and if he will make a statement on the matter. [24593/15]
View answerBorrowers whose loans are sold to unregulated entities will be protected by the Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015 when it is enacted. The purpose of the Bill is to ensure that consumers retain the protections they had prior to the sale of their loan. This Bill will require entities dealing with the consumer to be authorised by the Central Bank and subject to its Codes of Conduct. Dealing with the consumer is credit servicing and the definition of credit servicing is broad. Owners of loan books who deal directly with consumers, that is, who are servicing their own loan books, will be regulated. Otherwise they can have the loan book serviced by a regulated credit servicing firm.
The Code of Conduct on Mortgage Arrears specifically provides that the level of communications should be proportionate and not excessive, taking into account the circumstances of the borrowers, and that unnecessarily frequent communications should not be made.
The Bill was published in January and second stage of the Bill was taken in the Dáil on 4 February. The Bill is continuing its progress through the legislative process. The Bill was passed by the Dáil on 17 June and I look forward to further discussion of the Bill at Second Stage in the Seanad tomorrow (24 June).
The legislation will apply to all loans as defined, regardless of when they were acquired, thus capturing loan books that have already been sold. A similar approach was used in 2013 in relation to debt management firms. Also, when the requirement for a retail credit firm authorisation was itself introduced in 2007, existing non-deposit taking lenders (which up to then did not require authorisation from the Central Bank) had to get an authorisation from the Central Bank in order to continue their business. The Bill has transitional provisions to allow existing firms seek and obtain authorisation from the Central Bank while continuing to do business.
