Borrowers whose loans are sold to third parties remain protected

Borrowers whose loans are sold to third parties maintain the same regulatory protections they had prior to the sale, said Finance Minister Michael Noonan last week.

Mr Noonan was asked by Michael McGrath TD, Fianna Fáil, in the Dáil if he was satisfied with protections for mortgage holders, tenants and small and medium-sized enterprises from vulture funds that have acquired their loans.

Legislation enacted last July made credit servicing firms subject to the provisions of Irish financial services law that apply to “regulated financial service providers”, said Mr Noonan.

Regulatory protections include the consumer protection code, code of conduct on mortgage arrears, code of conduct for business lending to small and medium enterprises and the minimum competency code, issued by the Central Bank of Ireland.

Irish Cattle and Sheep Farmers’ Association (ICSA) warned this week that another major Irish bank may sell debt to a so-called vulture fund, following the Ulster Bank decision to sell some of its loan book.

According to IFA, Ulster Bank has given customers in debt management 30 days to refinance loans with another lender or potentially face a loan sale to a third party investor.