Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Act 2022
|
Amendment of section 28 of Act of 1997 | ||
|
2. Section 28 of the Act of 1997 is amended— | ||
(a) in subsection (1) — | ||
(i) by the insertion of the following definitions: | ||
“‘Act of 1995’ means the Consumer Credit Act 1995 ; | ||
‘consumer-hire agreement’ means an agreement of more than three months duration for the bailment of goods to a hirer under which the property in the goods remains with the owner; | ||
‘financial accommodation’ has the same meaning as it has in the Act of 1995; | ||
‘hirer’ means a relevant person who takes, intends to take or has taken goods from an owner under a hire-purchase agreement or a consumer-hire agreement in return for periodical payments; | ||
‘hire-purchase agreement’ means an agreement for the bailment of goods under which the hirer may buy the goods or under which the property in the goods will, if the terms of the agreement are complied with, pass to the hirer in return for periodical payments; and where by virtue of two or more agreements, none of which by itself constitutes a hire-purchase agreement, there is a bailment of goods and either the hirer may buy the goods, or the property therein will, if the terms of the agreements are complied with, pass to the hirer, the agreements shall be treated for the purpose of this Act as a single agreement made at the time when the last agreement was made; | ||
‘local authority’ has the same meaning as it has in the Act of 1995; | ||
‘owner’ means the person who lets or has let goods to a hirer under a hire-purchase agreement or a consumer-hire agreement; | ||
‘regulated credit entity’ means— | ||
(a) a person who is authorised, or, by virtue of subsection (4) or (5), taken to be authorised, to carry on the business of a credit servicing firm, or | ||
(b) a regulated financial services provider authorised, by the Bank or an authority that performs functions in an EEA country that are comparable to the functions performed by the Bank, to carry on a relevant activity in the State; | ||
‘relevant activity’ means— | ||
(a) directly or indirectly providing credit to, or | ||
(b) entering into a consumer-hire agreement or hire-purchase agreement with, | ||
a relevant person;”, | ||
(ii) by the substitution of the following definition for the definition of “credit”: | ||
“‘credit’ means— | ||
(a) a deferred payment, | ||
(b) a cash loan (whether or not provided on the security of a mortgage or charge over an estate or interest in land), or | ||
(c) other similar financial accommodation, | ||
but does not include— | ||
(i) credit of a class specified in section 3(2) of the Act of 1995, | ||
(ii) credit granted or made available under an agreement of a class specified in section 3(2) of the Act of 1995, | ||
(iii) credit arising under a transaction of a class specified in section 3(2) of the Act of 1995, | ||
(iv) a payment of a class specified in section 3(2) of the Act of 1995, or | ||
(v) bailment of goods to a hirer under an agreement of less than 3 months’ duration under which the property in the goods remains with the owner;”, | ||
(iii) by the substitution of the following definition for the definition of “credit servicing”: | ||
“‘credit servicing’ means— | ||
(a) in relation to a credit agreement, subject to subsection (2)(a) — | ||
(i) holding the legal title to the rights of the creditor under the agreement, | ||
(ii) managing or administering the agreement, including— | ||
(I) notifying the relevant borrower of changes in interest rates or in payments due under the agreement or other matters of which the agreement requires the relevant borrower to be notified, | ||
(II) taking any necessary steps for the purposes of collecting or recovering payments due under the agreement from the relevant borrower, or | ||
(III) managing or administering any of the following: | ||
(A) repayments under the agreement; | ||
(B) any charges imposed on the relevant borrower under the agreement; | ||
(C) any errors made in relation to the agreement; | ||
(D) any complaints made by the relevant borrower; | ||
(E) information or records relating to the relevant borrower in respect of the agreement; | ||
(F) the process by which a relevant borrower’s financial difficulties are addressed; | ||
(G) any alternative arrangements for repayment or other restructuring; | ||
(H) assessment of the relevant borrower’s financial circumstances and ability to repay under the agreement; | ||
(I) determination of the overall strategy for the management and administration of a portfolio of such agreements; | ||
(J) maintenance of control over key decisions relating to such a portfolio, | ||
or | ||
(iii) communicating with the relevant borrower in respect of any of the matters referred to in subparagraph (ii), | ||
and | ||
(b) in relation to a hire-purchase agreement or a consumer-hire agreement, subject to subsection (2)(b) — | ||
(i) holding the legal title to the rights of the owner under the agreement, | ||
(ii) managing or administering the agreement, including— | ||
(I) notifying the hirer of changes in payments due under the agreement or other matters of which the agreement requires the hirer to be notified, | ||
(II) taking any necessary steps for the purposes of collecting or recovering payments due under the agreement from the hirer, or | ||
(III) managing or administering any of the following: | ||
(A) repayments under the agreement; | ||
(B) any charges imposed on the hirer under the agreement; | ||
(C) any errors made in relation to the agreement; | ||
(D) any complaints made by the hirer; | ||
(E) information or records relating to the hirer in respect of the agreement; | ||
(F) the process by which a hirer’s financial difficulties are addressed; | ||
(G) any alternative arrangements for repayment or other restructuring; | ||
(H) assessment of the hirer’s financial circumstances and ability to repay under the agreement; | ||
(I) determination of the overall strategy for the management and administration of a portfolio of hire-purchase agreements, consumer-hire agreements or a mixture of hire-purchase and consumer-hire agreements; | ||
(J) maintenance of control over key decisions relating to such a portfolio, | ||
or | ||
(iii) communicating with the hirer in respect of any of the matters referred to in subparagraph (ii) ;”, | ||
(iv) in the definition of “credit servicing firm”— | ||
(I) by the substitution of “subject to subsections (2A) and (2B)” for “subject to subsection (2A)”, | ||
(II) in paragraph (a), by the substitution of “regulated credit entity” for “owner of credit”, | ||
(III) in paragraph (b), by the substitution of “subsection (3) or (3A)” for “subsection (3) ”, and | ||
(IV) by the substitution of the following paragraph for paragraph (d): | ||
“(d) a credit servicing firm referred to in paragraph (b) of section 34FA(1) that undertakes, on behalf of a person referred to in the said section 34FA, credit servicing within the meaning of clauses (I), (II) and (III)(A) to (H) of subparagraph (ii) and subparagraph (iii) of paragraph (a) of the definition of ‘credit servicing’;”, | ||
(v) by the deletion of the definition of “owner of credit”, | ||
(vi) by the substitution of the following definition for the definition of “regulated business”: | ||
“‘regulated business’ means a bureau de change business, a money transmission business, the business of a home reversion firm, the business of a retail credit firm, the business of a debt management firm or the business of a credit servicing firm;”, | ||
and | ||
(vii) by the substitution of the following definition for the definition of “retail credit firm”: | ||
“‘retail credit firm’ means a person whose business consists wholly or partly of any relevant activity but does not include— | ||
(a) a person who is a regulated financial service provider authorised, otherwise than under this Part, by— | ||
(i) the Bank, or | ||
(ii) an authority that performs functions in an EEA country that are comparable to the functions performed by the Bank, | ||
to carry out any relevant activity in the State, | ||
(b) a person who is a credit intermediary authorised under the Act of 1995, | ||
(c) in relation to— | ||
(i) credit that was originally provided by another person, a person to whom all or any part of that other person’s interest in the credit is directly or indirectly assigned or otherwise disposed of, or | ||
(ii) a consumer-hire agreement or a hire-purchase agreement that was entered into by another person, a person to whom that other person’s interest in the agreement concerned is directly or indirectly assigned or otherwise disposed of, | ||
(d) a person who carries out relevant activities on a once only or occasional basis and, in so doing, does not represent or create an impression (whether in advertising, marketing or otherwise) that the person would enter into agreements with other persons on the same or substantially similar terms as the agreements under which those relevant activities are carried out, | ||
(e) a person who is exempted, or a person who belongs to a class of persons that is exempted, for the purposes of this paragraph, under section 29A, | ||
(f) a person whose business consists partly of a relevant activity, but only by virtue of the person providing credit in the form of trade credit, or | ||
(g) a local authority.”, | ||
(b) by the insertion of the following subsection after subsection (1): | ||
“(1A) For the purposes of paragraph (f) of the definition of ‘retail credit firm’ in subsection (1), credit (in this subsection referred to as ‘the relevant credit’) is provided in the form of trade credit if all of the following conditions are satisfied: | ||
(a) in the case of both the person (in this subsection referred to as ‘the first-mentioned person’) by whom, and the person to whom, the relevant credit is provided, each is acting in the course of his or her business, trade or profession; | ||
(b) the first-mentioned person is not a regulated financial service provider; | ||
(c) the terms of the relevant credit provide for repayment, whether in instalments or as a single amount, of the whole of the credit by a date that is not later than 6 months after the date of its provision; | ||
(d) the purpose of the relevant credit is to facilitate the purchase of goods or services from the first-mentioned person.”, | ||
(c) by the substitution of the following subsection for subsection (2): | ||
“(2) For the purposes of this Part— | ||
(a) a person who holds the legal title to the rights of the creditor under a credit agreement (in this paragraph referred to as ‘the holder’) is taken to be credit servicing even if any action referred to in subparagraph (ii) or (iii), as the case may be, of paragraph (a) of the definition of ‘credit servicing’ in subsection (1) is being undertaken by a person, acting on behalf of the holder, authorised to carry on the business of a credit servicing firm, and | ||
(b) a person who holds the legal title to the rights of the owner under a consumer-hire agreement or a hire-purchase agreement (in this paragraph referred to as ‘the holder’) is taken to be credit servicing even if any action referred to in subparagraph (ii) or (iii), as the case may be, of paragraph (b) of the definition of ‘credit servicing’ in subsection (1) is being undertaken by a person, acting on behalf of the holder, authorised to carry on the business of a credit servicing firm.”, | ||
(d) by the substitution of the following subsection for subsection (2A)— | ||
“(2A) For the purposes of this Part, ‘credit servicing firm’, in relation to credit granted by, or the holding of legal title of the rights of a creditor under a credit agreement by, a regulated credit entity, does not include a securitisation special purpose entity to which any part of the interest of the regulated credit entity in the credit or rights concerned is directly or indirectly assigned or otherwise disposed of, as part of a securitisation, where— | ||
(a) the securitisation special purpose entity was established by or on behalf of the regulated credit entity as part of the securitisation arranged by or on behalf of that regulated credit entity, | ||
(b) the regulated credit entity retains the legal title in respect of the interest so assigned or otherwise disposed of, and | ||
(c) either— | ||
(i) the originator, sponsor or original lender of the securitisation, or | ||
(ii) in the case of a traditional NPE securitisation, the servicer, where it can demonstrate that it has expertise in servicing exposures of a similar nature to those securitised and that it has well-documented and adequate policies, procedures and risk-management controls in place relating to the servicing of exposures as required by Article 6 of the Securitisation Regulation, | ||
is required to retain on an ongoing basis a material net economic interest in the securitisation of not less than 5 per cent.”, | ||
(e) by the insertion of the following subsection after subsection (2A): | ||
“(2B) For the purposes of this Part, ‘credit servicing firm’, in relation to the rights of an owner under a consumer-hire agreement or hire-purchase agreement held by, or the holding of legal title to such rights by, a regulated credit entity, does not include a securitisation special purpose entity to which any part of the interest of the regulated credit entity in the rights concerned is directly or indirectly assigned or otherwise disposed of, as part of a securitisation, where— | ||
(a) the securitisation special purpose entity was established by or on behalf of the regulated credit entity as part of the securitisation arranged by or on behalf of that regulated credit entity, | ||
(b) the regulated credit entity retains the legal title in respect of the interest so assigned or otherwise disposed of, and | ||
(c) either— | ||
(i) the originator, sponsor or original lender of the securitisation, or | ||
(ii) in the case of a traditional NPE securitisation, the servicer, where it can demonstrate that it has expertise in servicing exposures of a similar nature to those securitised and that it has well-documented and adequate policies, procedures and risk-management controls in place relating to the servicing of exposures as required by Article 6 of the Securitisation Regulation, | ||
is required to retain on an ongoing basis a material net economic interest in the securitisation of not less than 5 per cent.”, | ||
(f) in subsection (3), by the substitution of “the business of a credit servicing firm in so far as that business comprises the activities referred to in paragraph (a) of the definition of ‘credit servicing’ in subsection (1) ”, for “the business of a credit servicing firm”, | ||
(g) by the insertion of the following subsection after subsection (3): | ||
“(3A) For the purposes of this Part, a person authorised by the Bank to carry on the business of a retail credit firm in respect of the activity referred to in paragraph (b) of the definition of ‘relevant activity’ in subsection (1) is taken to be authorised to carry on the business of a credit servicing firm in so far as that business comprises the activities referred to in paragraph (b) of the definition of ‘credit servicing’ in that subsection.”, | ||
and | ||
(h) by the insertion of the following subsection after subsection (4): | ||
“(5) For the purposes of this Part, a person (other than a regulated financial service provider taken to be authorised to carry on the business of a credit servicing firm by virtue of subsection (3)) authorised to carry on the business of a credit servicing firm before the coming into operation of section 2 (a)(iii) of the Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Act 2022 is taken to be authorised to carry on the business of a credit servicing firm, in so far as that business comprises the activities referred to in paragraph (a) of the definition of ‘credit servicing’ in subsection (1), after such coming into operation.”. |