Laws regulating vulture funds 'are a seismic shift'
New laws giving the Central Bank powers to "turn up at the door" of vulture funds will mark a "seismic shift", Fianna Fáil has claimed.
The legislation is expected to progress through the Dáil this evening despite the Government's initial hesitation.
Up to now, the funds, which buy up non-performing home and business loans from banks, have fallen outside the scope of normal regulation.
The borrower never gets to see or meet the people in the fund who will make decisions about restructuring mortgages. All contact goes through a regulated credit serving firm.
Permanent TSB, Ulster Bank and AIB have all progressed loan sales in recent months.
Fianna Fáil's finance spokesman Michael McGrath said the bill he had brought forward would give the Central Bank investigative powers. "The regulator will also, if necessary, be able to take enforcement action against these funds," he said.
"The bill will ensure whoever is ultimately calling the shots on the management of a loan portfolio will be regulated."
Mr McGrath said his party opposed the practice of banks selling troubled loans to third parties.
He argues this represents an "outsourcing of dirty work" when the banks should be attempting to strike their own deals with customers.
The bill, which will be debated in the Dáil today, is expected to move into the Seanad, and Mr McGrath hopes it will become legislation before the Christmas recess. However, he said it would not be "a panacea".
"Fianna Fáil believes that further reforms are needed to tackle the tens of thousands of legacy mortgage arrears cases," he said.