As the Deputy will be aware, as Minister for Finance, I cannot stop or reverse loan sales even by the banks in which the State has a shareholding. Decisions in this regard, as well as the criteria used to decide the make-up of loans to be included, are the sole responsibility of the board and management of the banks which must be run on an independent and commercial basis. The banks’ independence is protected by Relationship Frameworks which are legally binding documents that I cannot change unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.
It is important to reiterate that the protections in place for all borrowers before a sale, either by way of securitisation or otherwise, remain unchanged. 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’ including the Central Bank (Supervision and Enforcement) Act 2013 (Section 14) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 (‘the SME Regulations’). This ensures that consumers whose loans are sold to another firm, maintain the same regulatory protections that they had prior to the sale.
In regards to the overdraft issue, my response to your PQ in April (17964/19) advised that when overdrafts were being converted into a loan facility and transferred to a Retail Credit Firm customers had the right to appeal the withdrawal of the overdraft facility to the Credit Review Office (CRO). However in this case the company has not appealed and the bank (as per the letter you supplied) has confirmed that the company may apply for a new facility. Should this application be unsuccessful then the company has the right to appeal the bank's decision to the Credit Review Office (CRO). The CRO is able to review cases where credit facilities up to €3m are refused, withdrawn, or offered on unreasonable conditions. Details of how to appeal to the CRO can be found on the website www.creditreview.ie.