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Code of Conduct on Mortgage Arrears

Dáil Éireann Debate, Wednesday - 17 April 2019

Wednesday, 17 April 2019

Ceisteanna (61)

Pearse Doherty

Ceist:

61. Deputy Pearse Doherty asked the Minister for Finance his views on the use of fixed assets receivers by vulture funds and State-owned banks to force the sale of buy-to-let properties in arrears; and if he will make a statement on the matter. [17793/19]

Amharc ar fhreagra

Freagraí scríofa

As the Deputy will be aware, there is an extensive array of regulatory protections for borrowers who are in arrears under the various statutory Codes of Conduct issued by the Central Bank, such as the Consumer Protection Code 2012 and the Code of Conduct on Mortgage Arrears 2013 (CCMA). Furthermore under the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018, which came into effect on 21 January 2019, if a loan is transferred the holder of the legal title to the credit must now be authorised by the Central Bank as a credit servicing firm.  Such credit servicing firms must act in accordance with 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. 

However, while the legislative framework has been expanded to include the regulation of both loan owners and credit servicing, regulated lenders (or credit servicing firms) are entitled to make certain commercial decisions in relation to non performing loans whilst adhering to all the relevant consumer protection regulation that is in place.

The specific legislation and regulation of receivership would fall under the aegis of the Department of Business, Enterprise and Innovation who would be better placed to comment on and provide information on this topic.

With regard to the "state owned" banks or, more accurately, those in which the State has a majority shareholding, their corporate strategies and decisions are the responsibility of the boards and management and the firms must be run on an independent and commercial basis. The banks’ independence is protected by Relationship Frameworks which are legally binding documents which I as Minister, cannot change unilaterally. These frameworks which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.

That being said my officials received the following response from AIB:

"AIB continues to seek engagement with all borrowers in difficulty and only appoints Receivers when all other avenues have been exhausted. Appointments are primarily for the purpose of protecting and ultimately realising security, these are referred to as Fixed Asset Receivers. While appointed by the bank, the Receiver has a responsibility to realise the best return for the borrower."

My officials received the following from PTSB:

"Permanent TSB do not currently use Fixed Asset Receivers to sell properties".

Question No. 62 answered with Question No. 43.
Question No. 63 answered with Question No. 55.
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