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Mortgage Book Sales

Dáil Éireann Debate, Thursday - 28 February 2019

Thursday, 28 February 2019

Questions (8)

Clare Daly

Question:

8. Deputy Clare Daly asked the Minister for Finance the protections offered by the Central Bank to mortgage holders whose mortgages have been sold to a vulture fund in circumstances in which the owner of the loan rather than the intermediary servicing the loan takes a decision to increase the interest rate that applies to the loan, particularly in view of the lack of information in regard to the beneficial ownership of the loans transferred by a bank to a company (details supplied). [9933/19]

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Written answers

Officials in the Department of Finance referred the Deputy’s question to the Central Bank of Ireland. The Central Bank have advised the following:

"When a consumer takes out a loan from a regulated lender (“the original lender”) it is subject to all the relevant Irish and EU consumer protections. Most loan agreements include a clause that allows the original lender to sell the loan on to another firm.

“Under the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018, which came into effect on 21 January 2019, if a loan is transferred, the holder of the legal title to the credit must now be authorised by the Central Bank as a credit servicing firm. Such credit servicing firms must act in accordance with Irish financial services law that applies to ‘regulated financial service providers’. This ensures that consumers, whose loans are sold to another firm, maintain the same regulatory protections that they had prior to the sale, including under the various statutory Codes of Conduct issued by the Central Bank, such as the Consumer Protection Code 2012 and the Code of Conduct on Mortgage Arrears 2013 (CCMA).”

“However, while the legislative framework has been expanded to include the regulation of both loan owners and credit servicing, this does not give the Central Bank a statutory role in the setting of interest rates, which is a commercial decision for each regulated entity. Credit servicing firms (similar to any regulated lender) are entitled to make certain commercial decisions in relation to borrowers outside of the regulatory arena.”

Questions Nos. 9 to 13, inclusive, answered orally.
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