The Government has agreed to accept Fianna Fáil’s legislative proposal to regulate funds and also beef up the code of conduct of loan owners.
State-owned bank PTSB is preparing to sell off 18,000 mortgages, most which are home loans. However, there is concern borrowers will see their debts offloaded to unregulated bodies or funds.
Fianna Fáil finance spokesman Michael McGrath said he welcomed the Government’s commitment to accept his bill but said it must be enacted as a priority. The bill will be debated in the Dáil today.
He said the purpose of the bill was to ensure that funds, whether they are buying up a farm, business or home loan, are fully regulated by the Central Bank.
The purpose of the bill is to regulate credit agreement owners of mortgage loans and SME loans. The bill extends the provisions in the Consumer Protection Act 2015 to credit agreement owners, as opposed to just intermediaries or legal entities acting for funds.
“Ultimately, the loan owner, the vulture fund, calls all the important shots, makes all the future decisions about the future of a loan whether it be to initiate enforcement proceedings, restructure a loan or indeed to change the interest rate. What we are looking for is a significant change in government policy,” said Mr McGrath.
He said the current policy was that the credit servicing firm or middleman for a loan body needed to be regulated but not a fund itself.
Fianna Fáil also wants a review of the code of conduct of mortgage arrears, which was also agreed to by the Government yesterday.
This is to ensure that where loans have been restructured and people are meeting the terms of that restructured agreement, they are fully protected from any “aggressive action” by any new loan owner.
A stricter code will ensure that borrowers who have restructured their loans will not have those special deals altered. This would apply to agreed split mortgage deals, Mr McGrath said.
“So the indications are that the government will work with us and accept our bill,” he added.
“The most important thing is that this bill is not allowed to gather dust. This bill or any equivalent government legislation must become law and become law as a matter of priority so that we do have a common standard of regulation.
He said Fianna Fáil wanted the legislation enacted as a “priority” and put in place in a few months and before the PTSB loans are sold on.