Fianna Fáil is insisting its plan to regulate vulture funds is "needed now more than ever."
The bill is expected to make its way through the Dáil tomorrow after the Government agreed to support it.
Under current laws, funds that purchase loan portfolios are not required to follow Central Bank regulations – although they are obliged to employ an agent that is.
The Consumer Protection (Regulation of Credit Servicing Firms) (Amendment) Bill 2018 aims to ensure that any fund that purchases an Irish mortgage or loan faces full Central Bank regulation.
“This Fianna Fáil Bill has taken longer than we would have liked to get through the Dáil. The Government were luke-warm to the idea initially. They are now supporting it. It’s long overdue and we’re glad to be on the cusp of it passing.” @mmcgrathtd pic.twitter.com/F8A8qFWWXz
— Fianna Fáil (@fiannafailparty) November 21, 2018
Fianna Fáil finance spokesperson Michael McGrath said there has been an acceleration in the trend of banks selling loan portfolios to vulture funds in recent months - as European and domestic regulators increase the pressure on them to reduce their levels of non-performing loans.
"Mortgages, business and farm loans are now being sold on in very significant numbers," he said.
“Under the present system, the borrower never gets to see or meet the people in the fund who make all the important decisions concerning their loan.
"Instead, all contact is with a regulated credit servicing firm or ‘middleman,’ which is making no decisions and is in effect a conduit between the borrower and the fund.
"This is not an acceptable situation. Those controlling the loan and making the vital decisions must be regulated and held accountable."
FF PMB which will bring ‘vulture funds’ in line with Central Bank regulation will be debated at Report Stage tomorrow. “When our Bill becomes law ‘vulture funds’ can be directly inspected & investigated by the Central Bank.” @mmcgrathtd pic.twitter.com/4zqd1KRUqK
— Fianna Fáil (@fiannafailparty) November 21, 2018
Deputy McGrath said the bill will empower the Central Bank to directly inspect and investigate any vulture fund that purchases an Irish loan - and will be able to take enforcement action against it if necessary.
"Up until now, these funds have been untouchable," he said.
"The Central Bank will now, for the first time, be able to have direct contact with these funds and apply strict regulation directly to them.
"The Bill will ensure that whoever is ultimately calling the shots on the management of a loan portfolio will be regulated."
The bill will be debated at report stage in the Dáil tomorrow.
Should it be accepted, it will head on to the next stage in the Seanad.
