Richard Bruton
Question:9 Mr. R. Bruton asked the Minister for Enterprise and Employment the outcome of his moves to challenge recent increases in certain bank charges.
Ceisteanna — Questions. Oral Answers. - Increased Bank Charges.
Pat Rabbitte
Question:12 Mr. Rabbitte asked the Minister for Enterprise and Employment the results of the meeting between a Minister of State at his Department and Allied Irish Bank regarding the increase by AIB in a range of bank charges; if the agreement of AIB to withdraw the charges was secured; if not, the other steps, if any, he intends to take in connection with the matter; and if he will make a statement on the matter.
Mary Flaherty
Question:16 Miss Flaherty asked the Minister for Enterprise and Employment the nature, extent and outcome of the talks that one of the Ministers of State at his Department has had with the banks in relation to levels of bank charges.
Joe Costello
Question:40 Mr. Costello asked the Minister for Enterprise and Employment the circumstances in which a bank (details supplied) are proposing to increase the cost of services to their customers; whether, with record profit levels, this bank might not be expected to absorb increased charges; and if he will make a statement on the matter.
Michael Creed
Question:66 Mr. Creed asked the Minister for Enterprise and Employment the outcome of the discussions of one of the Ministers of State at his Department with Allied Irish Bank in relation to the level of charges; and the further action, if any, which he proposes to take.
Mary Flaherty
Question:74 Miss Flaherty asked the Minister for Enterprise and Employment the outcome of the talks that one of the Ministers of State at his Department had with the banks in relation to proposed increases in charges.
I propose to take Questions Nos. 9, 12, 16, 40, 66 and 74 together.
I met representatives of AIB Bank on 28 October 1993 to convey disquiet at the adverse effects which the new level of bank charges would have for business and consumers, particularly because of the multiplicity and proliferation of such charges. Bank charges are now becoming an increasing burden on business costs and household income, especially at a time of low inflation.
I am concerned at the difficulties which are created for the consumer when faced with increased new charges for various services. Bank charges are regulated under section 28 of the Central Bank Act, 1989. Each holder of a banking licence is required to notify the Central Bank of every proposal to change or impose a charge, and the term or condition applying to the provision of a service. In examining proposals to increase charges the Central Bank must take due cognisance of a bank's cost base.
I had a meeting with my colleague, the Minister for Finance, and the Governor of the Central Bank regarding the more effective regulation of bank charges. Following this meeting I am now considering the most appropriate way in assigning a role to the Director of Consumer Affairs under the recently published Consumer Credit Bill.
Did the Minister not indicate to the public by way of an article in the Irish Independent on 23 October that tough new controls would be introduced in the Consumer Credit Bill? That Bill has since been published and under the key sections dealing with control of charges and interest rates the banking sector has an exemption from the provisions of the Bill.
That is in effect a separate question. The Consumer Credit Bill will be introduced this week or early next week at which time there will be extensive discussion on it. Perhaps the Deputy is under a misconception in this regard? The Consumer Credit Bill was drafted following an EU directive on money lending. There are very tough controls on moneylenders, particularly in terms of differentiating between legal and illegal money lending, and the Director of Consumer Affairs has power to deal with misdemeanours in that regard. It would never be considered that bank interest charges, one of the issues raised by the Deputy, would be dealt with under the Consumer Credit Bill. That is a matter for the Central Bank, a macro-economic matter, which does not come under the consumer credit remit.
There is a need for a role for the Director of Consumer Affairs with regard to bank charges and to that end we are considering an amendment for insertion in the Consumer Credit Bill. On the basis that the draftsman had completed the Bill it seemed that the most appropriate way to deal with the matter was by way of an amendment.
Why did the Minister not issue a statement to the Irish Independent seeking a correction of the blanket headline which indicated that she was envisaging tough controls on bank charges in the Consumer Credit Bill? The Minister also indicated that as charges on credit cards were clearly excessive she would get to grips with this aspect. Will she not agree that the public has been let down in terms of her promise that was not delivered?
The Bill has not yet come before the House and we are discussing a hypothetical question. The Bill has to come to the Floor of the House and will be debated on Second Stage and Committee Stage. I am very open, as I am in all legislation, to accepting amendments from the Department and from Deputies opposite. The Deputy is talking about a situation that has not yet arisen. As to why we did not issue denials, I do not remember the article concerned but it would take from morning until night to issue——
It was good. It made the Minister look good.
I still look good. Let us wait for the Bill.
Deputy Rabbitte would know a lot about that. He is a specialist in that area.
Order.
Thank you, a Cheann Comhairle, for coming to my rescue. I strongly envisage, and I have constantly said that I see the Consumer Credit Bill as being tough on enforcement. I very much look forward to Deputy Bruton's support for the amendment to give to the Director of Consumer Affairs a role for the first time, in consultation with the Central Bank, in bank charges. I have not heard the Deputy express that point of view before. It is very welcome to me and to the Department that the Deputy will support my thrust in that regard.
Will the Minister agree she is being more than a little disingenuous to suggest that a Bill which received the approval of her Cabinet colleagues and presented by the Government to the House for debate does not constitute policy? Will she agree that the newspaper article, carried on the front page of the Irish Independent at the time, led the public to believe that she intended to do much more than she subsequently did?
I suggest that the Deputy watch this space.