| IRELAND - REGULATOR TO SUPERVISE SUB-PRIME LENDERS FROM FEBRUARY 2008 |
(By Emma Kennedy from the Sunday Business Post - Dublin,Ireland)
Sub-prime mortgage lenders and equity release firms have welcomed the Financial Regulator’s decision to regulate the sector with effect from early next year.
Previously, these types of firms were not fully regulated by the Financial Regulator, but they will be authorised and supervised from February.
Firms have been told to apply for authorisation, as failing to do so and continuing to operate will be an offence after April 30.
Earlier this year, the Financial Regulator introduced the Consumer Protection Code, but sub-prime lenders and home reversion firms were not obliged to comply with its rules.
However, they are subject to the terms of the Consumer Credit Act, which requires them to provide consumers with certain information and give them a cooling-off period on credit agreements.
A spokeswoman for the Financial Regulator said its main concern was that these lenders should be subject to the Consumer Protection Code.
‘‘In authorising them, we will assess the fitness and probity of owners and senior directors, their expertise and ability to comply with the code, minimum competency requirements and the anti-money laundering requirements, in addition to financial resources,” she said.
Sub-prime lenders were positive about being more stringently controlled.
‘‘We believe that customers should be protected in exactly the same manner as they are with the prime lenders in this market,” said a spokeswoman for sub-prime lender Start Mortgages.
‘‘Once authorised, we will become a regulated financial service provider for the purposes of the Consumer Protection Code.
‘‘As we have a l ready adopted the Consumer Protection Code on a voluntary basis, we should not have to make any further changes to our business operations from a compliance perspective.”
The new regime was also welcomed by a spokeswoman for Nua Homeloans, who said the firm would seek authorisation as soon as possible. A spokesman for Springboard Mortages said the new regime would ‘‘balance opinion and remove question marks regarding the specialist lending market’’ in Ireland.
Peter Mitchell, chief executive of lifetime mortgage provider Seniors Money Ireland, said: ‘‘At present, we are very comfortable with the regime set out by the Financial Regulator.
‘‘We anticipate that, going forward, the specifics of the regime may be adapted to the equity release sector specifically, and we will await any instruction from the Financial Regulator on this.” |
| ID: |
40711 |
| Author(s): |
SCR |
| Publication date: |
16/12/07 |
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Created: 20/12/07. Last changed: 20/12/07.
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