While no specific proposals have been put forward yet, the changes will most likely be aimed at providing customers with more information about subprime mortgages and loans and restricting certain marketing activities.

While subprime mortgages - homeloans with higher interest rates pitched at borrowers with either adverse or limited credit histories - are wellestablished in other markets like the US and UK, they are relatively new in Ireland and consumers are accordingly less familiar with the product.

Yet providers are saying new regulations will not have an affect on the way they conduct business, since they already behave as if they are fullyregulated.

"We're accredited, not regulated, " said Declan Fitzpatrick, managing director of Nua Homeloans, a subprime lender which opened in April. "But we would treat ourselves as a regulated entity in terms of rules, procedures and how we operate. We have absolutely nothing to hide."

Start Mortgages, the market leader with a loan book approaching Euro1bn, has already told the regulator it will be voluntarily adopting the Consumer Protection Code, irrespective of new regulation, according to managing director David Ingram.

"We fully welcome the new regulations and expect other providers will do the same, " said Ingram. "It won't make a difference to the way we run the business, but it will change market perception."

Both Ingram and Fitzpatrick expressed hope that clearer regulatory guidelines for the sector would counteract what they saw as "mispreporting and misrepresentation" of subprime lending in the media.

Ifsra's consumer consultative panel, which independently advises and monitors the regulator, has also been pushing for more regulatory attention in the subprime area. Minutes from the panel's most recent meetings record concern around the expansion of the subprime sector, and specifically that immigrants "were being driven into the subprime mortgage market". The consumer panel has members from the Money Advice and Budgeting Service and the Immigrant Council of Ireland.

On Friday Davy put out a bullish note in response to the reports of new regulation, pointing out that many new subprime players are still entering the market, which it expects to grow by 75% this year.