Michael McGrath (Cork South Central, Fianna Fail)
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56. To ask the Minister for Finance the level of interaction the Central Bank of Ireland has had with unregulated institutions who have purchased mortgage loans since the date of purchase; and if he will make a statement on the matter. [9876/14]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank of Ireland has informed me that by virtue of an exemption in Part V of the Central Bank Act 1997, an unregulated entity to whom a cash loan is transferred by a regulated entity is not subject to Central Bank supervision. The Central Bank  has expressed its concern that the consumer protections available to mortgage holders under the statutory Codes could be impacted by the sale of mortgage books to unregulated firms and my Department is working closely with the Central Bank on the issue. The Central Bank has also communicated to firms its preference that the outcome of any sale of mortgage books by regulated entities would ensure continuity of borrower protections under Codes and also that the purchaser would have relevant policies and procedures, systems and control checks to appropriately manage a mortgage loan book. The Central Bank has met a number of firms which have expressed interest in purchasing loan books in Ireland and specified its preference that such firms voluntarily comply with the Code of Conduct on Mortgage Arrears.

A number of the purchasers of mortgage loan books are abiding by the Central Bank Code of Conduct on Mortgage Arrears on a voluntary basis. I accept that this is not the same as the consumer having the right to the free service provided by the Financial Services Ombudsman; such a consumer would have recourse to the Courts in the usual manner. However, voluntary adherence to the Code seems to be in the interests of both the consumer and the purchasing entity.