I propose to take Questions Nos. 89 and 90 together.
As the Deputy will be aware, the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 was enacted on 24 December 2018 and commenced on 21 January 2019 and amended Part V of the Central Bank Act 1997 to expand the activity of credit servicing to include holding the legal title to credit granted under a credit agreement and associated ownership activities (i.e. ‘determination of overall strategy for the management and administration of a portfolio of credit agreements’ and the ‘maintenance of control over key decisions relating to the portfolio’).
Persons seeking to avail of the transitional arrangements provided for under Section 34FA(1) of the Central Bank Act, 1997 (as amended) were required to have completed and submitted an application for authorisation to the Central Bank by 21 April 2019 in order to continue to engage in the newly regulated activities now falling within the scope of the Act, pending a decision on their application by the Central Bank.
The Central Bank is independent in the performance of its functions. I am informed by the Bank that it has completed a review of the applications received by the 21 April 2019 statutory deadline from persons wishing to avail of the transitional provisions provided for in the Act to satisfy itself that the relevant persons have demonstrated that they meet the requirements to avail of these transitional provisions. The Central Bank has updated its public register of Credit Servicing Firms to include details of the 37 persons who met the relevant requirements (i.e. each relevant person is recorded as being a ‘transitional firm’ on the Register of Credit Servicing Firms which is available on its website).
I am informed that the Central Bank will now progress these applications to the assessment phase of the authorisation process where the Central Bank will assess each application to determine whether the relevant person has demonstrated that it meets the requirements set out in Part V, Chapter 3 of the 1997 Act, which include a requirement that the organisation of the person’s business structure is such that it is capable of being supervised adequately by the Central Bank, and the Authorisation Requirements and Standards for Credit Servicing Firms published by the Central Bank. The Central Bank will also assess whether key persons in senior positions within the applicant have demonstrated that they meet the Fitness and Probity Standards.
Once the assessment phase of the authorisation process is completed, an applicant will either be granted or refused authorisation and the public register of Credit Servicing Firms will be updated to reflect those firms who have been granted an authorisation.
I should add that persons who are taken to be authorised pursuant to the transitional provisions provided for in Section 34FA(1) of the Act are considered to be ‘regulated financial service providers’ for the purposes of financial services legislation and are thus required to comply with any applicable requirements of financial services legislation, including without limitation:
- Part V of the Central Bank Act, 1997 (as amended);
- Consumer Protection Code, 2012;
- Central Bank (Supervision and Enforcement) Act 2013 (Section 14) (Lending to Small and Medium-Sized Enterprises) Regulations 2015;
- Central Bank (Supervision and Enforcement) Act 2013 (Section 48 (1)) Minimum Competency Regulations 2017 and Minimum Competency Code 2017;
- Central Bank Act 1942;
- Code of Conduct on Mortgage Arrears, 2013;
- Fitness and Probity Regulations and Standards issued under Part 3 of the Central Bank Reform Act, 2010; and
- Authorisation Requirements and Standards for Credit Servicing Firms.
The Central Bank does not comment on individual applications or on its regulatory engagement with regulated entities so I am not in a position to comment on the details sought by the Deputy regarding its engagement. The Bank has also confirmed that it does not share information on the numbers and values of mortgage and commercial loans owned by various categories of funds sought by the Deputy.