July 05, 2018

ECB published its opinion on the Consumer Protection (Regulation of Credit Servicing Firms (Amendment)) Bill (draft law) in Ireland. ECB offers several suggestions for improvement and welcomes the intention to exempt securitization from the scope of the draft law, as this will ensure that the draft law does not discourage securitization activity. However, ECB states that this exemption is not fully clear from the current text of the draft law. Therefore, it is suggested that the drafting be further reviewed, to ensure full legal certainty in this respect.

ECB, in June 2018, had received a request from the Chairman of the Oireachtas (the Irish National Parliament) Joint Committee on Finance, Public Expenditure, and Reform and Taoiseach (the Irish Prime Minister), for an opinion on this regulation (CON/2018/31) on the business of owning credit agreements. The draft law intends to regulate the owners of credit agreements entered into with natural persons and with micro, small, or medium-size enterprises. The law seeks to regulate credit agreement owners by extending existing provisions of Irish law to the entities, in particular the Central Bank Act 1997, which regulates the activities of retail credit firms and credit servicing firms.

Additional key highlights of the ECB opinion on the draft of the Irish law are as follows: 

  • ECB states that the draft law must carefully balance the benefits of creating well-functioning secondary markets against the impetus to protect debtors. Provisions within the draft law may create a burden of costs for investors, which could impede their participation in secondary markets, thus reducing overall participation and reducing price competition in the market place. 
  • The current text of the draft law may raise issues of legal certainty. The draft law amends a number of existing provisions of Irish law. In some cases, it is unclear how these amendments interact with the existing provisions and with the existing powers of the Central Bank of Ireland.
  • ECB notes that, on March 03, 2018, EC published its proposal for a Directive on credit servicers, credit purchasers, and the recovery of collateral. This proposal seeks to set out a common EU framework and requirements for credit servicers, for credit purchasers, and for the recovery of collateral in respect of credit agreements concluded with business borrowers. If this proposed Directive is adopted by the European Parliament and the Council, its provisions will be transposed into Irish law, requiring further amendment of the rules applicable to credit servicing and credit ownership.

 

Related Link: ECB Opinion (PDF)

Keywords: Europe, EU, Banking, Securities, Credit Agreements, Credit Agreement Owners, Securitization, Central Bank of Ireland, ECB

Related Articles
News

FSB to Evaluate Effects of Too-Big-To-Fail Reforms for Systemic Banks

FSB is seeking feedback as part of its evaluation of the effects of the too-big-to-fail reforms for banks.

May 23, 2019 WebPage Regulatory News
News

APRA Releases Minor Changes to Reporting Standards on SA-CCR for Banks

APRA released minor changes to the three reporting standards for the standardized approach for measuring counterparty credit risk exposures (SA-CCR).

May 22, 2019 WebPage Regulatory News
News

APRA on Industry Self-Assessments into Governance and Accountability

APRA released an information paper analyzing the self-assessments performed by 36 of the country’s largest banks, insurers, and superannuation licensees in response to the final report on the Prudential Inquiry into the Commonwealth Bank of Australia (CBA).

May 22, 2019 WebPage Regulatory News
News

PRA Consults on Maintenance of TMTP Under Solvency II

PRA published a consultation paper (CP11/19) that sets out its approach to update supervisory statement (SS6/16) on maintenance of the transitional measure on technical provisions (TMTP) under Solvency II.

May 22, 2019 WebPage Regulatory News
News

APRA Proposes to Amend Guidance on Residential Mortgage Lending

APRA is consulting on revisions to the prudential practice guide APG 223 on residential mortgage lending in Australia.

May 21, 2019 WebPage Regulatory News
News

IASB Proposes Improvements to IFRS 9 and IFRS 16

IASB published the exposure draft ED 2019/2 that proposes amendments to four IFRS standards, including IFRS 9 on Financial Instruments and IFRS 16 on Leases.

May 21, 2019 WebPage Regulatory News
News

Denis Beau of BDF on Supervisory Priorities for Climate-Change Risks

Denis Beau, the First Deputy Governor of BDF, delivered opening remarks at the BCBS-BSCEE-FSI High-level Meeting for Europe on banking supervision.

May 21, 2019 WebPage Regulatory News
News

ISDA CDM to be Deployed for UK Digital Regulatory Reporting Pilot

ISDA announced deployment of the ISDA Common Domain Model (ISDA CDM 2.0) to support the UK FCA, BoE, and participating financial institutions in testing phase two of the Digital Regulatory Reporting pilot for derivatives.

May 21, 2019 WebPage Regulatory News
News

MAS to Consolidate Regulation of Merchant Banks Under Banking Act

MAS published a consultation paper that proposes to consolidate the regulation of merchant banks under the Banking Act and to move merchant banks to a licensing regime under the MAS Act.

May 21, 2019 WebPage Regulatory News
News

ESAs Amend Technical Standards on Mapping of ECAIs Under CRR

ESAs published a second amendment to the implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk under the Capital Requirements Regulation (CRR).

May 20, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3118