The Deputy will be aware that the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 was enacted on 8 July 2015. It was introduced to fill the consumer protection gap where loans were sold by the original lender to an unregulated firm. The 2015 Act introduced a regulatory regime for a new type of entity called a 'credit servicing firm'. Credit Servicing Firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'. This ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes (such as the Consumer Protection Code, Code of Conduct on Mortgage Arrears, Code of Conduct for Business Lending to Small and Medium Enterprises and the Minimum Competency Code) issued by the Central Bank of Ireland and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 which comes into operation on 1 July 2016.
The Code of Conduct for Mortgage Arrears provides protections for borrowers who endeavour to meet their commitments in relation to their mortgages and the 2015 Act ensures that these protections apply when a loan has been sold.
Our commitment on this issue is underlined by the Programme for a Partnership Government provides that "To reflect the growing public concern regarding credit servicing firms and other property firms we will ask the Central Bank and the Oireachtas Committee on Housing to examine the legislation introduced last year that ensured that borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale. We will provide greater protection for mortgage holders and tenants and SMEs whose loans have been transferred to non-regulated entities ( vulture funds )." This is a Year 1 Action in the programme. The Government is very conscious of the difficulties faced by borrowers and the efforts that they are making to meet their commitments.
