The Consumer Protection (Regulation of Credit Servicing Firms) Bill 2018 passed through Report and Final stages in the Dáil last evening.
Seven amendments to the text of the Bill resulting from Committee stage were proposed by Fianna Fáil sponsor of the Bill, Deputy Michael McGrath. Last evening, all seven amendments were passed.
Two amendments related to wording changes that were suggested by the drafter to make the Bill read better. Three amendments related to wording changes related to ensuring the 'securitisation exemption' would function as intended. The remaining two amendments were aimed at addressing a concern of the Central Bank of Ireland in respect of transitional authorisations for persons carrying out the newly regulated credit servicing activities (once the Bill becomes law).
During the Dáil debate, Minister for Finance, Deputy Paschal Donohoe, stated:
- "On Committee Stage, a significant amount of discussion took place on the Bill and since that time my officials and Deputy McGrath have worked to deal with some matters that have emerged.
- Between my Department and the Central Bank, we have been able to resolve some matters [relating to whether the credit servicing regime or the retail credit servicing regime was the most appropriate] that emerged when the legislation was examined in detail.
- The Central Bank has made it clear that it is satisfied with the approach taken to regulating owners as credit servicing firms.
- The passage of this Bill also has to be seen in the light of the recent review of the code of conduct on mortgage arrears…
- As I have affirmed to Deputy Michael McGrath, it is my intention that the Bill will be commenced as soon as possible after its enactment in the Dáil [emphasis added]."
Deputy McGrath stated, in relation to two of the securitisation amendments, that:
- "The Central Bank has been consulted to ensure that they do not give rise to any unintended consequence. As far as we can see, the amendments will work to allow completely passive securitisation vehicles to continue operating without authorisation, since all activities will be undertaken by regulated credit servicing firms.
- It was always the intention to exclude passive securitisation.
- These amendments will not allow firms that undertake any of the newly regulated activities to structure themselves in such a way as to avoid regulation. If they are undertaking any of the newly regulated activities, they will need authorisation. Generally speaking, the activities will continue to be undertaken by the original lender."
Deputy McGrath stated, in relation to the other transitional authorisation arrangements amendments, that:
- "The other amendments are aimed at addressing a concern of the Central Bank that was notified to the Select Committee on Finance, Public Expenditure and Reform, and Taoiseach. The issue is that an owner transitionally authorised by making an application to the Central Bank within three months of the commencement of the legislation would be answerable to the Central Bank for the activities of its credit servicing firm. The credit servicing firm in this case would no longer need to be regulated in its own right. Without the amendments proposed, this may be prior to the transitionally authorised owner having a full presence in Ireland that can be pursued by the Central Bank for any breach. The amendments will mean that the transitional authorisation only applies to the newly regulated activities and only for as long as the other activities are undertaken by a regulated credit servicing firm."
At the end of the debate, Deputy McGrath expressed a hope for the bill to become law before year end, if possible [emphasis added].
We now wait for this Bill to be scheduled in the Seanad for the next stage of the legislative process. We will continue to monitor progress of this Bill through the remaining legislative stages over the coming weeks.
The text of the Bill (as passed by the Dáil) will be available in the coming days on the Oireachtas' website.
