Dáil Éireann Debate, Tuesday - 18 December 2018
164. Deputy Pearse Doherty asked the Minister for Finance the reason the code of practice on the transfer of mortgages is considered voluntary; the legal basis on which it was issued; the reason it was issued if there was no legal basis for same; and if he will make a statement on the matter. [53412/18]
Amharc ar fhreagra165. Deputy Pearse Doherty asked the Minister for Finance his views on the statement (details supplied) of his predecessor on the code of practice for the transfer of mortgages of the Central Bank. [53413/18]
Amharc ar fhreagraI propose to take Questions Nos. 164 and 165 together.
The Central Bank is empowered to impose codes of conduct under Section 117 of the Central Bank Act 1989. Such codes of conduct are required to be complied with by the regulated entities to whom they take effect as a matter of law. This means that the Central Bank can take action against a regulated entity which does not comply with a code of conduct (for example by imposing a direction on such entity or taking enforcement action under the Central Bank’s Administrative Sanctions Procedure). Both the Code of Conduct for Mortgage Arrears and the Consumer Protection Code are issued under Section 117 of the Central Bank Act 1989 and therefore are required to be complied with as a matter of law.
The Code of Practice on the Transfer of Mortgages was introduced in 1991. It was not issued under any statutory provision and is a voluntary code. It would have issued at a time when there would have been significant movements of mortgages between building societies.
That said, the enactment of the Consumer Protection (Regulation of Credit Servicing Firms) 2015 means that the protections which a borrower had before a loan was sold were not lost on the sale. Credit servicing firms are now regulated entities and are required as a matter of law to comply with the Central Bank Codes.
Of particular relevance, is paragraph 3.11 which provides
"Where a regulated entity intends to cease operating, merge with another, or to transfer all or part of its regulated activities to another regulated entity it must:
a) notify the Central Bank immediately;
b) provide at least two months' notice to affected consumers to enable them to make alternative arrangements;
c) ensure all outstanding business is properly completed prior to the transfer, merger or cessation of operations or, alternatively in the case of a transfer or merger, inform the consumer of how continuity of service will be provided following the transfer or merger; and
d) in the case of a merger or transfer of regulated activities, inform the consumer that their details are being transferred to the other regulated entity, if that is the case."
