Dáil Éireann Debate, Thursday - 22 February 2018
69. Deputy Michael McGrath asked the Minister for Finance the rules regarding the ownership of accounts into which a mortgage borrower makes repayments when the mortgage loan is owned by an unregulated loan owner but serviced by a regulated credit servicing firm; if the account must be in the name of the regulated credit servicing firm; if it can be in the name of the unregulated loan owner; and if he will make a statement on the matter. [9222/18]
Amharc ar fhreagraMost loan agreements include a clause that allows the original lender to sell the loan on to another firm. The Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 (“the 2015 Act”) was introduced to fill the consumer protection gap where loans are sold by the original lender to an unregulated firm. Under the 2015 Act, if the firm who bought loans from the original lender is an unregulated firm, then the loans must be serviced by a ‘credit servicing firm’ which is regulated by the Central Bank. Credit Servicing Firms are typically firms that manage or administer credit agreements such as mortgages or other loans on behalf of unregulated entities.
Credit servicing firms must act in accordance with the requirements of Irish financial services law that applies to ‘regulated financial service providers’. This ensures that consumers, whose loans are sold to another firm, maintain the same regulatory protections that they had prior to the sale, including under the various statutory Codes of Conduct issued by the Central Bank.
The 2015 Act does not include any specific rules regarding whether the account must be in the name of the regulated credit servicing firm or if it can be in the name of the unregulated loan owner.
