Dáil Éireann Debate, Wednesday - 15 April 2015
147. Deputy Michael Creed asked the Minister for Finance the number of distressed mortgages on family homes which are held by financial institutions not regulated by the Central Bank of Ireland, but which may be subject to regulation in the United Kingdom; which may have held mortgage protection insurance that has not been activated; which are held by retired persons on pension; and if he will make a statement on the matter. [14273/15]
Amharc ar fhreagraI am informed by the Central Bank of Ireland that its recent Quarterly Bulletin provides disaggregated information on non-bank entities operating in Ireland which includes authorised retail credit firms, as well as entities holding mortgage loans that were previously on the balance sheets of Irish resident banks. A number of these entities are currently unregulated and more details are provided below.
By end-2014, non-bank entities accounted for 5.6% of all outstanding PDH mortgage loans. Further information is available in Box A on page 31 of Q2 2015 Bulletin available at http://www.centralbank.ie/publications/Documents/Quarterly%20Bulletin%20No.%202%202015.pdf.
It is important to note that not all non-bank entities are unregulated firms. Approximately two thirds of non-bank mortgage accounts are with entities authorised by the Central Bank as retail credit firms.
All regulated mortgage lenders, including retail credit firms, are required to comply with the requirements of the Code of Conduct on Mortgage Arrears (CCMA), which sets out the statutory consumer protection provisions that all regulated mortgage lenders must comply with when dealing with distressed borrowers.
The balance of approximately one third of non-bank mortgage accounts is made up of unregulated entities that have acquired mortgage loan books. These firms are not subject to regulation by the Central Bank and are not subject to the provisions of its Codes, such as the CCMA, although many firms have stated that they will voluntarily comply. The Central Bank is unable to comment on firms that may be subject to regulation by the UK Authorities.
It is my intention to ensure that borrowers whose loans are sold by a regulated entity to a currently unregulated entity maintain the same protections as they had prior to the sale.
The Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015 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 Bill was published in January and second stage of the Bill was taken in the Dáil on 4 February. Since then, my officials have been in contact with the Central Bank and with the Office of the Attorney General to further progress the legislation. The Bill will continue its progress through the legislative process and I look forward to further discussion of the Bill at Committee Stage.
Neither the Central Bank nor my own Department collect data about the level of distressed mortgages that may have associated payment protection insurance policies that have not been activated. It is also the case that no breakdown is available of the level of distressed mortgages owned by retired persons.
