Answer: The Central Bank don’t deal with mortgage complaints is why…

We should probably pose the question, ‘Why haven’t the Central Bank dealt with any complaints about abuses of the Code of Conduct on Mortgage Arrears?’.

The answer is the blog topic. The Central Bank are a regulator, not a receiver of and adjudicator of complaints.

The Central Bank do have a sanction regime, but it is mainly regarding that of regulation from the perspective of qualifying for regulation, for complaints about the CCMA the most appropriate authority is the Financial Services Ombudsman.

And they have been dealing with mortgage complaints for quite some time, they even have a category for it in their reports.

Not only that, their own chairperson notes (see page 11) that mortgage related complaints were a massive 50% of the complaints received! And in many cases the complaints are partially substantiated and a lower number fully substantiated.

In general complaints are down, complaints received for 2014 were 4,477, a decrease overall of 42% year on year.

This is encouraging as it means more complaints are being dealt with prior …

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NAMA can’t ‘opt in’ to regulation

Something that has been circulating of late is that if NAMA buy the Irish Nationwide (subsumed into IBRC) loan book that they will follow best practise and no borrower will be ‘less well off’ due to it in terms of regulatory protection.

This is not true because an important aspect of regulatory protection is that of recourse to the office of the Financial Services Ombudsman (FSO). This recourse is covered in section 51 of the Code of Conduct on Mortgage Arrears and also in the Consumer Protection Code of 2012 10.9(d).

Simply stating that you will follow or mimic the existing codes and regulation isn’t the same as actually being covered by them, it doesn’t grant jurisdiction. The FSO cannot structurally cover a complaint made against an unregulated entity. It really isn’t far different than going to them with a complaint about a restaurant you ate at, if they don’t cover the institution they can’t deal with the complaint.

The oft overlooked point is that the granting of regulation …

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The issue with the case against ‘Reckless lending’

In operations I have two main roles, firstly is the obvious operational aspect of any company which has to do with logistics of loan suppliers and our distribution to clients as well as looking at the general business planning to ensure we are always at the best of our abilities. The other role is regulatory, I act as a compliance officer, while that is not a legal position, it is one in which the practical aspects of law surrounding financial services are to be found, how it works in real life.

On that basis I was surprised to see that there were several articles talking about the use of tort law to prove negligence in lending, and with that, a particular reference to the Consumer Protection Code (CPC) which has since been updated. While I admire the initiative being taken by New Beginning I have some doubts which I will express here.

One issue we have had with regulation is that it actually …

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The tax of Regulation

It is worth noting that the constant calls for ‘Regulation’ are partly flawed, on one hand we do need more regulation, such as regulation of our Government agencies who can’t control their spending, regulation and accountability of our regulator, and of course (most importantly), some regulation of central banks who’s ability to keep rates too low and aid in the creation of money is closely linked with every major boom/bust in the last 100 years.

However, further regulation on financial services companies, and in particular small financial companies is not going to achieve the very aim it sets out to do, namely that of protecting consumers. It would be far better to have an ombudsman and regulator with teeth than to look for more laws that can be broken without retribution [in this respect banks have broken strict rules with almost total impunity].

Financial services are also a zero VAT business, this means that while we pay 21.5% VAT for everything we receive, we cannot charge VAT to our clients, thus, all of our …

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FSA warns banks, but will the Irish Regulator follow suit?

The FSA (Financial Services Authority) has warned specialist lenders that it has extreme reservations over how they are handling some arrears cases which may ultimately end in repossession. They felt that many lenders were overly ready to take court action against borrowers irrespective of their individual circumstances and that they focused purely on regaining the arrears.

From a lenders perspective this is a concern, if the FSA starts to come out in support of people who don’t repay their loans it can spell disaster for the financial institutions who lent out the money in good faith, if there is a prevailing belief that ‘you dont’ have to repay because the government is behind you’ it will send out the wrong message and creating an ‘unwillingness’ to repay debts and that won’t stop with banks, it can permeate into many aspects of the economy, right down to companies not paying eachother. Thankfully, the FSA stopped short of saying that they would get behind people in arrears and instead tried to keep …

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