As the Deputy will be aware, 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 2015 (“the 2015 Act”), if a firm who bought loans from an original lender is unregulated, then the loans must be serviced by a Credit Servicing Firm who is authorised and regulated by the Central Bank.
Credit servicing firms are firms who manage or administer loans on behalf of the unregulated firm. ‘Credit servicing’ includes all interactions with the consumer in respect of the loan, including:
- Notification of changes in interest rates or payments due;
- Collecting repayments on the loan;
- Managing complaints; and
- Assessing the consumer’s financial circumstances in cases of financial difficulties.
Under the 2015 Act, ‘credit servicing’ does not include:
- the determination of the overall strategy for the management and administration of a portfolio of credit agreements;
- the maintenance of control over key decisions relating to such portfolio; or
- taking such steps as may be necessary for the purposes of—
(i) enabling the undertaking of credit servicing by another person, or
(ii) enforcing a credit agreement.
