Ireland: Consumer Protection (Regulation Of Credit Servicing Firms) Act 2015

A New Regime For "Credit Servicing"
Last Updated: 28 July 2015
Article by Enda Newton


The Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 (the "Act") was introduced to ensure that consumers and SMEs whose loans have been sold to unregulated entities will continue to enjoy the same protections they enjoyed prior to the sale of their loan. The Act creates a new type of regulated entity (the "credit servicing firm"). A credit servicing firm is one which interact directly with borrowers in relation to their loans. The Act amends the provisions of a number of the Central Bank Acts.


As credit institutions in the State continue to repair their balance sheets and deleverage through the sale of large loan portfolios some concern had been expressed in relation to the sale of such portfolios to unregulated buyers. This is because the sale of loan portfolios often resulted in consumers and SMEs losing the various protections which they had been afforded while dealing with their original lenders such as the Code of Conduct on Mortgage Arrears, the Consumer Protection Code and the Code of Conduct for Business Lending to Small and Medium Enterprises (the "Central Bank Codes").

Although many purchasers of loan books had already agreed to voluntarily apply the Central Bank of Ireland ("CBI") codes when managing loan books, voluntary compliance was not enforceable by any state agency. As a result, the Government committed to ensuring these protections would be made available for all consumers whose loans have been sold to unregulated entities. The Act will require entities engaging in credit servicing to be authorised by the CBI and subject to the Central Bank Codes.


The Act defines credit servicing as "managing and administering a loan agreement" and expressly includes a number of activities set out in the Act including:

  • Notifying the relevant borrower of changes in interest rates or in payments due under the credit agreement or other matters of which the credit agreement requires the relevant borrower to be notified;
  • Taking any necessary steps for the purposes of collecting or recovering payments due under the credit agreement from the relevant borrower;
  • Managing or administering any of the following:

    • repayments under the credit agreement;
    • any charges imposed on the relevant borrower under the credit agreement;
    • any errors made in relation to the credit agreement;
    • any complaints made by the relevant borrower;
    • information or records relating to the relevant borrower in respect of the credit agreement;
    • the process by which a relevant borrower's financial difficulties are addressed;
    • any alternative arrangements for repayment or other restructuring;
    • assessment of the relevant borrower's financial circumstances and ability to repay under the credit agreement; or
    • communicating with the relevant borrower in respect of any of the above matters.

The Act also expressly excludes certain activities from the scope of the "credit servicing" definition including:

  • The determination of the overall strategy for the management and administration of a portfolio of credit agreements;
  • The maintenance of control over key decisions relating to such portfolio; or
  • Taking such steps as may be necessary for the purpose of:

    • enabling the undertaking of credit servicing by another person; or
    • enforcing a credit agreement.

The Act excludes these activities to avoid a situation where the acquirer of a loan portfolio (usually an SPV) would fall within the definition of a "credit servicing firm" by simply taking steps to set the overall strategy for that loan portfolio (including the taking of steps to appoint a credit servicing firm).


The legislation defines a credit servicing firm as a person (other than NAMA or any NAMA group entity) who undertakes:

  • credit servicing other than on behalf of a regulated financial service provider authorised by the CBI or an equivalent authority in the EEA; or
  • holds the legal title to credit granted under a credit agreement in respect of which credit servicing is not being undertaken by a person authorised to carry on the business of a credit servicing firm.

Existing regulated financial service providers authorised by the CBI or an equivalent authority in the EEA are deemed to be authorised to carry on the business of a credit servicing firm.


The Act applies to "Relevant Borrowers" under a credit agreement. The Act defines a Relevant Borrower as:

  • a natural person (i.e. a person who is not a professional client for the purposes of the MiFiD Regulations nor a regulated financial services provider); or
  • a micro, small or medium sized enterprise within the meaning of Article 2 of the Annex to the Commission Recommendation 2003/361/EC of 6 May 2003, but only to the extent that such credit was granted to it by a financial service provider authorised by the CBI or an equivalent authority in the EEA to provide credit in the State.


The Act provides for the deemed authorisation of firms which were conducting credit servicing activities before the Act came into effect. Those firms which enjoy a deemed authorisation must apply for authorisation to the CBI by 8 October 2015. Such firms will be required to comply with the Central Bank Codes immediately. New credit servicing firms must apply to the CBI for authorisation.

The CBI has recently published a consultation paper on the authorisation requirements and standards for credit servicing firms (Consultation Paper 96).


The Act is a welcome statutory extension of the protections afforded to consumers and SMEs whose loans have been sold by banks to unregulated entities.

Purchasers of loan portfolios must, however, exercise care to ensure that they do not stray into areas of activity which require authorisation and, to this end, the responsibility for "macro" decisions relating to loan portfolios and day to day decisions relating to the management of loans within those loan portfolios will need to be carefully defined.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions