Thursday, 20 June 2019

Questions (80)

Michael McGrath

Question:

80. Deputy Michael McGrath asked the Minister for Finance if a credit servicing firm, which is currently in a transitional authorisation status, falls under the Financial Services and Pensions Ombudsman; if past instances that originated before the firm began the process of being regulated is appealable to the Financial Services and Pensions Ombudsman; and if he will make a statement on the matter. [26032/19]

View answer

Written answers (Question to Finance)

The 21st of January 2019 was appointed as the day on which the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 came into operation by Statutory Instrument 3 of 2019. Persons had three months from that date to avail of the transitional provisions in the Act. As I previously confirmed in reply to a Parliamentary Question yesterday (PQ 25649), persons who are taken to be authorised pursuant to the transitional provisions provided for in Section 34 FA(1) of the Central Bank Act 1997 are considered to be ‘regulated financial service providers’ for the purposes of financial services legislation and the Financial Services and Pensions Ombudsman may investigate complaints against these transitionally authorised firms.

Actions by an unregulated firm which were undertaken prior to the commencement of the 2018 Act would not be subject to investigation by the Financial Services and Pensions Ombudsman. It is my understanding that only the conduct of those firms, from the date when the firms became taken to be authorised, will fall within the jurisdiction of the Ombudsman.

However, section 34 G(1) of the Central Bank Act 1997 as amended by the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 provides

"A credit servicing firm shall not, on its own behalf or on behalf of, or on the instructions of, a person who holds the legal title to credit granted under a credit agreement, take or fail to take an action, if the taking of or the failure to take the action would otherwise be a prescribed contravention if a retail credit firm took or failed to take that action."

While the holding of legal title only became regulated recently, other credit servicing firms which acted on behalf of loan owners were regulated under the 2015 legislation and their actions can be subject to investigation by the Financial Services and Pensions Ombudsman.

I should also point out that section 34 G of the Central Bank Act 1997 also provides that

"(2) A person who holds the legal title to credit granted under a credit agreement shall not instruct a credit servicing firm to take or fail to take an action, if the taking of or the failure to take the action would otherwise be a prescribed contravention if a retail credit firm took or failed to take that action.

(3) A person who contravenes subsection (2) commits an offence and is liable -

(a) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months, or both, or

(b) on conviction on indictment, to a fine not exceeding €250,000 or imprisonment for a term not exceeding 5 years, or both."