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Mortgage Credit Directive

Click here to read an article on the Mortgage Credit Directive.


Recent Case: Declan McDonald –v- Thomas Michael Hill [2014] IEHC 629

The recent decision of Mr Justice Binchy is an important one concerning the standard of proof required in relation to the issuance of demand letters. The case centres around whether or not a demand letter was actually sent by a bank.

This matter concerned an interlocutory application brought by a receiver wherein the receiver sought orders, inter alia, restraining the defendant from attempting to frustrate the activities of the receiver over certain receivership property. 

Loan facilities were advanced to the defendant for the purpose of purchasing a public house in August 2007. In or around January 2012, the defendant defaulted on the loan. By letter dated 26 January 2012 the Bank demanded payment of arrears.  Between that date and 22 November 2013, the Bank wrote to the defendant demanding repayment of arrears a total of 16 times.  The defendant acknowledged receipt of 9 of these demand letters.  By letter dated 22 November 2013 (the “November Demand Letter”), the Bank claimed it sent a demand letter to the defendant demanding payment of the amount then owing by the defendant to the Bank.  The defendant denied ever receiving the November Demand Letter.  The defendant continued to make repayments after 22 November 2013 and claimed he would not have done so if he had received the November Demand Letter.

Affidavits were put before the Court to support the contention that the letter was sent.  A bank manager affirmed that he “checked, printed, signed and placed in the internal bank postage process (for subsequent external posting to the defendant via the Head Office of the Bank)”.  He also confirmed that he had logged the issuance of the November Demand letter to the  “the customer portal in the Bank’s internal computer system”.  However, despite this, the Court held that the Receiver was unable to prove as a matter of certainty that the November Demand Letter was sent.

The Court stated that evidence that a letter had issued could be in the form of a certificate of posting or an affidavit from the person who actually posted the letter.

The full judgment can be read here.

Our recommended steps for adequate proof of service can be found at this link.

Fitness and Probity Regime FAQs

On 18 February the Central Bank published “Fitness and Probity – Frequently Asked Questions” to address commonly asked questions raised in relation to the operation of the Fitness and Probity Regime under Part 3 of the Central Bank Reform Act 2010.  A copy of the FAQs is attached.

Central Bank Publishes Report on Anti-Money Laundering/Countering the Financing of Terrorism and Financial Sanctions Compliance in the Irish Banking Sector

On 17 February the Central Bank published a report of its observations in relation to Anti-Money Laundering, Countering the Financing of Terrorism and Financial Sanctions compliance by banks in Ireland.  The issues identified include:

  1. Risk assessments are inadequate – banks are not considering the inherent risks they face and are undertaking assessment at a high level only;
  2. Reviews are inadequate – banks are not including AML/CFT reviews in annual monitoring and internal audit plans; and
  3. Training is inadequate – banks are not ensuring appropriate and comprehensive training is given to Board and committee members.

Click here to read the press release and access the report.

Central Bank Publishes Consumer Protection Outlook Report

The Central Bank published its first Consumer Protection Outlook Report on 6 February.  The Report outlines the Central Bank’s consumer protection objectives.  Key priorities include:

  1. To secure legislation extending the same protections of Irish financial services legislation to borrowers whose loans are sold on to non-regulated lenders;
  2. To introduce additional protections for SMEs when accessing credit, and requirements for firms dealing with SMEs when they get into financial difficulty;
  3. To ensure companies understand consumers and require them to demonstrate that their products are fit for consumer purpose;
  4. To monitor companies’ compliance with the Central Bank’s guidance; and
  5. Monitor and challenge how firms are responding to the Bank’s 2014 guidance on appropriate variable remuneration arrangements in recognition of the impact of incentive structures on culture and practices.

Click here to read the press release and report.

Central Bank Publishes Enforcement Priorities

The Central Bank (the “CBI”) published its enforcement priorities on 9 February.  The CBI will concentrate on the following areas across all sectors;

  • Prudential requirements
  • Systems and controls
  • Provision of timely, complete and accurate information to the Central Bank
  • Appropriate governance and oversight of outsourced activities
  • Anti-Money Laundering /Counter Terrorism Financing compliance

The CBI has also set sector specific enforcement priority areas. Of particular note is the continued focus on the suitability of sales in the Consumer Protection area. This follows on from the CBI’s themed inspection into the sale of PPI and its focus on the suitability of the product for customers.

Please click here to read the CBI’s enforcement priorities in full.

Central Bank (Amendment) Act 2015

On 4 February, the Central Bank (Amendment) Act, 2015 (the “Act”) was enacted. The Act amends section 33AK of the Central Bank Act, 1942.  In doing so, the purpose of the Act is to enable the Oireachtas Joint Committee responsible for conducting the Banking Inquiry to access certain confidential banking information held by the Central Bank of Ireland.

Click here to access the full text of the Act.

Financial Conduct Authority Publishes Crowdfunding Review

Following its introduction of new rules on 1 April 2014, the UK’s Financial Conduct Authority (FCA) has published a review of the regulatory regime for crowdfunding. In that time, the crowdfunding market has continued to rapidly expand. While the FCA concluded that no changes to the regulatory regime were currently required, it outlined a number of concerns regarding the crowdfunding market. Click here to read the full review.

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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