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Dáil Éireann debate -
Wednesday, 10 May 1995

Vol. 452 No. 6

Consumer Credit Bill, 1994: Report Stage (Resumed).

Debate resumed on amendment No. 48a:
In page 30, to delete lines 16 to 18.

Deputy O'Rourke wanted me to clarify a point relating to amendment No. 48a. I confirm that it gives the Minister power to make regulations on the form and content of credit agreements either in this part or the relevant part of the Third Schedule. The form is laid out in Part I of the Third Schedule and it gives the Minister the power to extend or to vary that but not while a particular agreement is extant, in other words, if a person has entered into a credit agreement, the terms of the agreement entered into apply.

Amendment agreed to.

I move amendment No. 48b:

In page 30, to delete lines 19 to 21, and substitute the following:

36.—The Minister may make regulations in relation to the form and content of credit agreements and in so doing may amend or modify this Part or Part I of the Third Schedule.

Amendment agreed to.

I move amendment No. 48c:

In page 30, between lines 21 and 22, to insert the following:

37.—A creditor shall not be entitled to enforce a credit agreement or any contract of guarantee relating thereto, and no security given by the consumer in respect of money payable under the credit agreement or given by a guarantor in respect of money payable under such contract of guarantee as aforesaid shall be enforceable against the consumer or guarantor by any holder thereof, unless the requirements specified in this Part have been complied with:

Provided that if a court is satisfied in any action that a failure to comply with any of the aforesaid requirements, other than section 34, was not deliberate and has not prejudiced the consumer, and that it would be just and equitable to dispense with the requirement, the court may, subject to any conditions that it sees fit to impose, decide that the agreement shall be enforceable.

38.—A creditor who is a party to a credit agreement to which this Part applies shall ensure that the agreement complies with this Part and any regulations made under section 36.

Amendment agreed to.

I note that recommittal is necessary in respect of amendment No. 49 in the name of the Minister. Amendments Nos. 49, 53, 54, 55, 58 to 61, inclusive, and 64 are consequential on amendment No. 51. It is suggested that amendments Nos. 49, 51, 53, 54, 55, 58 to 61, inclusive, and 64 be discussed together. Is that agreed? Agreed.

Bill recommitted in respect of amendment No. 49.

I move amendment No. 49:

In page 30, line 24, after "creditor's" to insert "or owner's".

Members will remember the effect of amendment No. 4 which we discussed on 5 April which was to exclude hire purchase agreements from the definition of credit agreements. When the definition of credit agreement included hire purchase, the reference to the creditor also embraced the term "owner". In hire purchase transactions there are normally two rather than one other party to the transaction, there is the owner supplier, for example, the garage, shop or dealer and the credit institution. Because of this it is now necessary in the view of the Attorney General's Office to specify "owner" as well as "creditor" separately. This is the purpose of amendments Nos. 49, 51, 53, 54, 58 to 61, inclusive, and 64.

Amendment No. 55 stipulates that section 40 relating to the duty of a creditor to supply documents and information during the currency of a credit agreement shall not apply to a housing loan. Section 110 makes that provision of such documents and information mandatory in the case of a housing loan to take into account the much longer duration of such loans and inevitable changes from time to time in interest rates. Housing loans were always excluded from section 40 and amendment No. 55 puts this exclusion as a stand alone subsection. This makes the purpose and scope of the Bill clearer to consumers.

Amendment agreed to.
Amendment reported.

I move amendment No. 50:

In page 30, line 24, to delete "a credit" and substitute "an".

Amendment agreed to.

I move amendment No. 51:

In page 31, to delete lines 19 and 20 and substitute the following:

"(1) Subject to this section, a creditor or an owner shall during the currency of the agreement provide,".

Amendment agreed to.

I move amendment No. 52:

In page 31, line 26, before "date" to insert "the".

This is a textual amendment and it arises in section 40 (1) (b) relating to the duty of creditors to supply documents and information. It corrects the omission of the word "the" from the present text. The new text of section 40 (1) (b) therefore reads: "the amount, if any, due but unpaid and the date and amount of each instalment that remains unpaid, and".

Amendment agreed to.

I move amendment No. 53:

In page 31, line 31, after "creditor" to insert "or an owner".

Amendment agreed to.

I move amendment No. 54:

In page 31, line 34, after "creditor" to insert "or the owner, as the case may be,".

Amendment agreed to.

I move amendment No. 55:

In page 31, after line 45, to insert the following:

"(7) This section does not apply to a housing loan.".

Amendment agreed to.
Bill recommitted in respect of amendment No. 56.

I move amendment No. 56:

In page 32, to delete lines 1 to 5.

Under this amendment it is proposed to delete section 41 of the Bill whereby if a consumer, by virtue of a credit agreement other than a housing loan, is under a duty to keep the goods covered by the agreement under his possession or control he must inform the creditor where the goods are within ten days of receipt of a request as to their whereabouts. It was intended that this duty to provide information would relate only to goods which were the subject of hire-purchase or consumer hire agreements. As hire-purchase is no longer covered by the definition of credit agreement, this section is not appropriate to Part III of the Bill which relates to the form and content of credit agreements. The same provision is being reinstated by amendments Nos. 78 and 85 respectively in Parts VI and VII concerning hire-purchase and consumer hire agreements.

Amendment agreed to.
Amendment reported.

I move amendment No. 57:

In page 32, line 7, to delete "credit".

Amendment agreed to.

I move amendment No. 58:

In page 32, line 7, after "creditor" to insert "or owner".

Amendment agreed to.

I move amendment No. 59:

In page 32, line 12, after "creditor" to insert "or owner, as the case may be,".

Amendment agreed to.

I move amendment No. 60.

In page 32, line 23, after "creditor" to insert", owner".

Amendment agreed to.

I move amendment No. 61:

In page 32, line 30, after "creditor" to insert", owner".

Amendment agreed to.

I move amendment No. 62:

In page 32, line 32, to delete "a credit" and substitute "an".

Amendment agreed to.

I move amendment No. 63.

In page 32, line 35, to delete "credit".

Amendment agreed to.

I move amendment No. 64:

In page 32, line 44, after "creditor" to insert", owner".

Amendment agreed to.

I move amendment No. 65:

In page 33, line 15, to delete "a credit" and substitute "an".

Amendment agreed to.

I move amendment No. 66:

In page 34, to delete lines 23 to 47 and in page 35 to delete lines 1 to 34.

On 2 November 1994 the previous Government decided that section 48 relating to the use of terms in credit agreements which are not fair and reasonable should be deleted. Underlying this decision was the knowledge that such terms would be outlawed by regulations to be made which would give effect to the EU directive of 1993 on unfair terms in consumer contracts. On 1 February 1995 my colleague, the Minister for Enterprise and Employment, signed regulations implementing the EU directive. Its principal effect is that unfair terms in all consumer contracts concluded after 31 December 1994 are illegal, thus the regulations extend much wider than the scope of this Bill which is concerned with credit agreements, hire-purchase and consumer hire agreements.

Is it to give effect to an EU directive?

The EU directive has been in place since 2 February.

Amendment agreed to.

I move amendment No. 67:

In page 35, line 36, to delete "a credit" and substitute "an".

Amendment agreed to.

I move amendment No. 68:

In page 35, line 39, to delete "a credit" and substitute "an".

Amendment agreed to.
Amendment No. 69 not moved.

Is it in order for me to comment on amendment No. 69?

That amendment was not moved so it cannot be discussed.

I wish to put on record that I am amenable to accepting it and will address it in the Seanad.

I move amendment No. 70:

In page 36, lines 4 and 5, to delete "determine a credit agreement" and substitute "withdraw from an agreement".

This amendment seeks to delete "determine a credit agreement" and substitute "withdraw from an agreement".

It is a change of language. It was suggested by the parliamentary draftsman's office that the term "withdraw from an agreement" was tidier and more effective than the words "determine a credit agreement". The impact is the same and the provision is not changed.

Amendment agreed to.

I move amendment No. 71:

In page 36, line 16, to delete "CREDIT".

Amendment agreed to.

Amendments Nos. 71a and 73b are related and may be discussed together.

I move amendment No. 71a:

In page 36, line 22, to delete "credit".

I refer to amendment No. 4 which we agreed to on 4 April. This deleted hire-purchase from the scope of the definition of credit agreement. Quite a number of the amendments refer to that decision. Consequently, it is necessary to amend sections 51 and 54 by deleting the reference to "credit" as in "credit agreement" and substitute "an" as in "an agreement" so that these sections still apply to a hire-purchase agreement. In other words, the reference to credit is too restrictive.

Amendment agreed to.

Amendments Nos. 72 and 72d are related and may be discussed together.

I move amendment No. 72:

In page 36, lines 25 and 26, to delete "a credit agreement other than a hire-purchase agreement" and substitute "an agreement".

This refers to amendment No. 4 which deleted hire-purchase from the scope of the definition of credit agreement. Consequently, it is necessary to amend sections 52 and 53 by deleting the reference to credit in "credit agreement" and substituting "an". Otherwise these sections would not apply to hire-purchase agreements.

Amendment agreed to.

The next amendment is No. 72a. Amendment No. 72e is cognate and it is suggested that they be discussed together.

I move amendment No. 72a:

In page 36, line 32, after "purpose" to insert", and different methods of formulae may be approved for different classes of agreements".

Sections 52 and 53 deal with the early settlement of debt. These amendments shall permit different formulae, as approved by the Central Bank in the case where the creditor is a credit institution or the Director of Consumer Affairs in any other case, to be used for different forms of agreement, for example, a credit agreement, a cash loan, a moneylending agreement or whatever. This happens in cases where the indebtedness is discharged before the time fixed in the agreement as provided for in section 52 and in the case of section 53 where it became mandatory to discharge the debt before the due time. These formulae shall be used to calculate the reduction in the amount which the consumer shall pay where the debt is repaid or has to be repaid before the time fixed in the agreement. The original text did not provide for any distinction between the various forms of credit. The onus will now reside with the various financial institutions to ensure that the early payment provisions in the various classes of credit agreement are in accordance with the formulae to be devised for these proposals by the Central Bank. Thus it would be in the interests of the institutions to enter into early dialogue with the bank. Equally, all other creditors should make contact with the Director of Consumer Affairs to satisfy themselves that their early settlement arrangements correspond with the formulae now being drawn up.

Yesterday evening my attention was drawn for the first time to the fact that these formulae do not apply to consumer hire agreements, in which Deputy Kitt is interested. I will consider between now and the debate in the Seanad the question of the Central Bank coming forward with corresponding formulae which shall apply to hire purchase and consumer hire agreements.

I welcome the Minister's comments. How will consumers be made aware that they can contact the Director of Consumer Affairs about these special provisions where the amount owed becomes payable before the time fixed in the agreement?

We discussed this matter on Committee Stage. This format is required to be featured on the credit agreement and, therefore, consumers entering into this kind of agreement will have that information. I have counselled that the institutions should talk to the Central Bank in anticipation of this legislation being enacted and that all other creditors should talk to the Director of Consumer Affairs about the precise formulae to be used. That formulae will be featured on agreements into which consumers enter and they will know their rights.

Amendment agreed to.

We now come to amendment No. 72b. Amendments Nos. 72c, 72f and 72g are related. I suggest that we discuss amendments Nos. 72b, 72c, 72f and 72g together.

I move amendment No. 72b:

In page 36, to delete lines 33 and 34, and substitute the following:

"(a) by the Central Bank in the case of an agreement where the creditor or the owner, as the case may be, is a credit institution, or".

The amendments in this group shall apply equally in the case of voluntary early settlement of a debt by the consumer or where the debt was called in early by the creditor because of, for example, failure to meet repayment schedules. The new wording in sections 52 and 53 reflects, first, the need to specify the term "owner" in respect of a hire purchase agreement and, second, the proposal to have different formulae for different categories of agreement. Amendments Nos. 72b and 72f reflect the removal of hire purchase agreements from the definition of credit agreements and reapply the scope of sections 52 and 53 to hire purchase agreements through the deletion of the word "credit" and the inclusion of the word "owner". Amendments Nos. 72c and 72g reword subsections (2) of sections 52 and 53 in accordance with amendments Nos. 72a and 72e which provide for different formulae to apply for different classes of credit.

Amendment agreed to.

I move amendment No. 72c:

In page 36, to delete lines 36 to 39, and substitute the following:

"(2) The Minister, with the consent of the Minister for Finance, and after consultation with the Central Bank, may prescribe a method or formula for the reduction under subsection (1) in relation to agreements generally or any class of agreement, which shall be in lieu of any method or formula approved of under that subsection.".

Amendment agreed to.

I move amendment No. 72d:

In page 36, line 41, to delete "a credit agreement" and substitute "an agreement".

Amendment agreed to.

I move amendment No. 72e:

In page 36, line 45, after "purpose" to insert, ", and different methods or formulae may be approved for different classes of agreements".

Amendment agreed to.

I move amendment No. 72f:

In page 37, to delete lines 1 and 2, and substitute the following:

"(a) by the Central Bank in the case of an agreement where the creditor or the owner, as the case may be, is a credit institution, or".

Amendment agreed to.

I move amendment No. 72g:

In page 37, to delete lines 4 to 7, and substitute the following:

"(2) The Minister, with the consent of the Minister for Finance, and after consultation with the Central Bank, may prescribe a method or formula for the reduction under subsection (1) in relation to agreements generally or any class of agreement, which shall be in lieu of any method or formula approved of under that subsection.".

Amendment agreed to.
Bill recommitted in respect of amendment No. 73.

I move amendment No. 73:

In page 37, line 8, to delete "Subject to section 59".

The purpose of this amendment is to reflect the removal of hire purchase agreements from the definition of credit agreement. This is consistent with earlier amendments. The provisions in section 54 on the limitation of creditors' rights to enforce an agreement were in the original text subject to section 59 which relates to the limitation on the right of the owner to recover possession of goods under a hire purchase agreement. As a credit agreement no longer includes a hire purchase agreement the reference in section 54 to section 59 is irrelevant.

Amendment agreed to.
Amendment reported.

Amendments Nos. 73a, 73c, 73d, 73e, 73f, 74 and 74a form a composite proposal and it is suggested that they be discussed together. Is that agreed? Agreed.

I move amendment No. 73a:

In page 37, line 8, after "creditor" to insert "or an owner".

This group of amendments stems from the decision taken on 5 April to exclude hire purchase agreements from the definition of credit agreement. When the definition of credit agreement included hire purchase the reference to the creditor also embraced the term owner. In hire purchase transactions there are normally two rather than one other party to the transaction — the owner-supplier which can be a garage, shop or dealer and the credit institution. Because of this the Attorney General's Office believes it is necessary to specify the owner as well as the creditor separately and the amendments reflect this requirement.

If that is the view of the Attorney General's Office then we agree with it.

It is to bring it into conformity.

Amendment agreed to.

I move amendment No. 73b:

In page 37, line 9, to delete "a credit agreement" and substitute "an agreement".

Amendment agreed to.

I move amendment No. 73c:

In page 37, line 18, after "creditor" to insert "or owner, as the case may be".

Amendment agreed to.

I move amendment No. 73d:

In page 37, line 25, after "creditor" to insert "or an owner".

Amendment agreed to.

I move amendment No. 73e:

In page 37, line 37, after "creditor" to insert "or owner, as the case may be".

Amendment agreed to.

I move amendment No. 73f:

In page 38, line 18, after "creditor" to insert "or an owner".

Amendment agreed to.

I move amendment No. 74:

In page 38, line 22, after "creditor" to insert "or an owner".

Amendment agreed to.

I move amendment No. 74a:

In page 38, line 25, after "creditor" to insert "or owner as the case may be".

Amendment agreed to.

I move amendment No. 75:

In page 38, to delete lines 28 and 29 and substitute the following:

"56.—This Part shall apply to hire-purchase agreements.".

Amendment agreed to.

We come to amendment No. 76. Amendment No. 103 is consequential. It is suggested that amendments Nos. 76 and 103 be discussed together, if that is satisfactory? Agreed.

I move amendment No. 76:

In page 38, between lines 42 and 43, to insert the following:

"58.—(1) A hire-purchase agreement and any contract of guarantee relating thereto shall be made in writing and signed by the hirer and by or on behalf of all other parties to the agreement, and—

(a) a copy of the agreement shall be—

(i) handed personally to the hirer upon the making of the agreement, or

(ii) delivered or sent by prepaid registered post to the hirer by the owner within 10 days of the making of the agreement, and

(b) in the case of any contract of guarantee relating to the agreement, a copy of the guarantee and the agreement shall be—

(i) handed personally to the guarantor upon the making of the contract, or

(ii) sent within 10 days of the making of any contract by the seller to the guarantor.

(2) A hire-purchase agreement shall contain a statement of—

(a) the hire-purchase price,

(b) the cash price of the goods to which the agreement relates,

(c) the amount of each of the instalments by which the hire-purchase price is to be paid,

(d) the date, or the method of determining the date, upon which each instalment is payable,

(e) the number of instalments,

(f) the names and addresses of all parties to the agreement at the time of its making, and

(g) any costs or penalties to which the hirer will become liable for any failure by the hirer to comply with the terms of the agreement.

(3) A hire-purchase agreement shall contain a list of the goods to which the agreement relates sufficient to identify them.

(4) A hire-purchase agreement shall contain a notice which is at least as prominent as the rest of the contents of the agreement, in the terms specified in the Fifth Schedule.

(5) A hire-purchase agreement shall contain in respect of the coolingoff period a statement that the hirer—

(a) has a right to withdraw from the agreement without penalty if the hirer gives written notice to this effect to the seller within a period of 10 days of the date of receipt by the hirer of a copy of the agreement, or

(b) may indicate that he does not wish to exercise this right by signing a statement to this effect, this signature to be separate from, and additional to, the hirer's signature in relation to any of the terms of the agreement.

(6) A hire-purchase agreement shall contain a statement to the effect that a hirer is obliged to give the owner information under section 64 as to the whereabouts of the goods to which the agreement relates.

(7) A hire-purchase agreement shall contain in a prominent position the words `Hire-purchase agreement'.

59.—An owner shall not be entitled to enforce a hire-purchase agreement or any contract of guarantee relating thereto or any right to recover the goods from the hirer, and no security given by the hirer in respect of money payable under the hire-purchase agreement or given by a guarantor in respect of money payable under such contract of guarantee as aforesaid shall be enforceable against the hirer or guarantor by any holder thereof, unless the requirements specified in sections 57 and 58 have been complied with:

Provided that if a court is satisfied in any action that a failure to comply with any of the aforesaid requirements, other than section 58 (1), was not deliberate and has not prejudiced the hirer, and that it would be just and equitable to dispense with the requirement, the court may, subject to any conditions that it sees fit to impose, decide that the agreement shall be enforceable.

60.—The Minister may make regulations in relation to the form and content of hire-purchase agreements and in so doing may amend or modify section 58 and the references contained in section 59.

61.—An owner who is a party to a hire-purchase agreement shall ensure that the contents of the agreement comply with sections 58 and 59 and any regulations made under section 60.

62.—(1) Subject to subsection (2), any provision in any hire-purchase agreement whereby—

(a) an owner or a person acting on the owner's behalf is authorised to enter upon any premises for the purpose of taking possession of goods which have been let under a hire-purchase agreement,

(b) the right conferred on a hirer by this Part to determine a hire-purchase agreement is excluded or restricted,

(c) any liability in addition to the liability imposed by this Part is imposed on a hirer by reason of the termination of the hire-purchase agreement by the hirer under this Part,

(d) a hirer, after the determination of the hire-purchase agreement or the bailment in any manner whatsoever, is subject to a liability which exceeds the liability to which he would have been subject if the agreement had been determined by him under this Part,

(e) any person acting on behalf of an owner or seller in connection with the formation or conclusion of a hire-purchase agreement is treated as or deemed to be the agent of the hirer, or

(f) an owner or seller is relieved from liability for the acts or defaults of any person acting on his behalf in connection with the formation or conclusion of a hire-purchase agreement,

shall be void.

(2) Subsection (1) does not apply in relation to a provision in a hire-purchase agreement whereby an owner of a motor vehicle which has been let under a hire-purchase agreement or a person acting on his behalf—

(a) authorised to enter premises (other than a house used as a dwelling or any building within the curtilage thereof) for the purpose of taking possession of the motor vehicle, or

(b) relieved from liability for any such entry.".

This is an extensive amendment, the purpose of which is to align the requirements of hire purchase agreements with those accepted under earlier amendments in respect of credit agreements. Previously, hire purchase agreements were comprehended and included within the general definition of a credit agreement. This composite definition made it somewhat difficult to distinguish and to extract the relevant and, indeed the specific provisions which would apply in the case of hire purchase agreements.

Section 58 now provides in a clear and logical manner the text and layout of the requirements and information which must be contained in hire purchase agreements. These include provisions relating to the agreement in writing and signed by the contracting parties given to the hirer at the time of making the agreement or else delivered within ten days of making the agreement; the information which must be included in the agreement; the comparative price information; the amount and frequency of instalments; a list of the goods covered by the agreement; the cooling off period and so on. The amendment also provides for, in section 61, a duty on the owner of the goods to ensure that the hire purchase agreement is in accordance with the provisions of the Bill and, if not, it shall be unenforceable unless a court rules otherwise.

If amendment No. 69 had been moved by Deputies McDowell or Molloy I would have indicated that the provisions in relation to unenforceability in the case of hire purchase would also be aligned and made consistent with the proviso on section 18. This is now being done and the result is that if it can be shown to the satisfaction of the court that the failure to comply was not deliberate and, in this instance, does not prejudice the hirer, the court may decide, subject to any conditions it may lay down, that the agreements shall be enforceable.

Under this amendment, the Minister is empowered by section 60 to make regulations amending the form and content of hire purchase agreements. This approach is in harmony with that stipulated elsewhere in the Bill as regards the other forms of agreement which the legislation covers. It also provides the opportunity to adapt and update the provisions here in line with any changes in the financial sector's practices.

This amendment provides that a hire purchase agreement shall be void if it provides that, first, the owner or a person acting on his behalf enters any premises to seize possession of the goods, apart from motor vehicles, covered by the hire purchase agreement; second, the right of the hirer to determine the agreement is excluded or restricted in any way; third, additional and uncovenanted liability is imposed on the hirer when terminating the agreement; fourth, the amount to be given in final settlement is in excess of what the agreement provides; fifth, the owner's or seller's agent is also treated as acting on behalf of the hirer — this would place the hirer in a most disadvantageous position; sixth, the owner or seller is relieved or held not to be responsible for the actions of their agents.

Subsection (2) (i) goes on to provide that the seller or owner may take possession of a motor vehicle for which a court order has been obtained on condition that the repossession or seizure does not take place at the home or any adjoining buildings, for example, garage, driveway, etc., of the hirer.

Amendment No. 103 which relates to section 50 (3), requires that a hire purchase agreement contains a notice which is at least as prominent as the rest of the contents of the agreement in the terms specified — I refer Deputies to the Fifth Schedule. Amendment No. 103 inserts the Fifth Schedule which reproduces the schedule contained in the 1946 Act to the Bill. The schedule details for the consumer's information, in simple text, their rights in relation to the hire purchase agreement provided by the Act. It covers the hirer's right to terminate the agreement, the options available on termination and the cost of termination. It also covers the restriction on an owner to enter the hirer's premises to recover the goods. On termination the hirer must either pay any instalments which are in arrears at the time the hirer gives notice of termination and, if and when, the hirer has paid those instalments the total amount under the agreement is less than the amount required to be paid by section 61 (2), the hirer must pay enough to make up that sum.

Section 61 (2) provides that the owner pay the amount, if any, by which one half of the hire purchase price exceeds the total sums paid or a much lesser amount, if so specified in the agreement, or, purchase the goods by paying the difference between the amount already paid under the agreement and the hire purchase price, when this amount has been reduced in accordance with sections 52 or 53, as the case may be. The schedule also states unequivocally that where a hirer has not purchased the goods and the goods have been damaged, owing to the hirer's failure to have taken reasonable care of the goods, then the owner may sue the hirer for the amount of the damage, unless that amount can be agreed between the hirer and the owner.

The schedule advises the hirer to examine whether the agreement contains provisions which allow the hirer to put an end to the agreement on terms more favourable to him than those just mentioned. As the hirers may not be aware of their rights as regards repossession of the goods, the schedule sets out those rights clearly for the hirer's information. Deputy Kitt raised the same point earlier in the context of the previous section. The hirer is thereby advised that without his consent the owner has no authority to enter the hirer's premises for the purpose of taking back the goods, other than a motor vehicle for which other particular circumstances apply. In the instance of a motor vehicle the owner is entitled to enforce any right which he may have under an agreement to enter any land of the hirer other than his home or any buildings attached thereto. When one third of the hire purchase price has been paid and the hirer has ended the agreement without exercising the option to purchase the goods, the owner cannot take the goods back from the hirer without the hirer's consent, unless the owner has obtained a court order or is taking back a motor vehicle which has been abandoned or left unattended in circumstances likely to result in damage to the vehicle. In this instance, the owner may recover and retain possession of it pending the making of a court order.

This is a contentious amendment and one that causes me concern. It appears as if all the law is on the side of the consumer. If a person purchases a carpet through a hire purchase agreement, has it fitted in the home and nine or ten days later decides it is the wrong colour, or purchases some type of furniture which has to be built in, what does the Minister recommend to protect the trader who sold the item?

Sometimes consumers require immediate delivery of an item. At Christmas time, people make rushed decisions to buy goods, or insist on having appliances etc. fitted quickly. If the item is damaged while being fitted and has to be taken back, who will pay? This amendment will have very serious repercussions for small traders who sell carpets, furniture, wallpaper and so on. I ask the Minister to relax the amendment — there must be some middle ground. This is an excellent Bill introduced by my colleague, Deputy O'Rourke when she had responsibility for labour affairs, but we must have greater concern for business people. If, say, a carpet has been fitted and, within the ten day period, the consumer or somebody else decides it is not the right colour, he can come up with some excuse or other and return the carpet. This will have damaging effects on business. The cost of such contingencies would have to be built into the price of goods thus making them uncompetitive. I appeal to the Minister to examine this further.

I listened carefully to the Minister and I feel he is trying to get the right balance. Some elements of the section are quite controversial, for example, the question of sellers taking possession of items that have been sold and the rights of owners to enter a hirer's premises. This is a complex and controversial area of law. I am concerned that consumers be aware of their rights, and I accept that these will be laid out in the agreement. I would emphasise the importance of a strong publicity campaign when this Bill becomes law to explain in as simple a way as possible the concepts of this legislation — lengthy agreements mean nothing to the consumer. The Minister indicated how complex this section is and has clarified some points, but I appeal to him to ensure, in the interests of the consumer, that the central points are spelt out clearly.

I share some of the concerns of my colleague, Deputy O'Keeffe. We must get the balance right and not over-complicate what has been a central part of Irish business life, that is, good relations between the business community and the consumer.

I can give the Deputies the assurances they seek. Perhaps Deputy O'Keeffe misunderstands the legislation as it will operate. If it operated as he envisages it could indeed damage the small trader in particular. Deputy O'Keeffe suggested that one could buy a carpet, put it in the living room and after a few drinks at the weekend decide the colour was not right, that the carpet should be sent back and that because of the ten day cooling off period the unfortunate trader would be at a loss. That is not how the section will operate. In terms of that type of product, the consumer walks in off the high street and buys the carpet but the trader will not part with the carpet until the ten days have expired — the consumer has ten days to reflect on whether it is the right pattern. When the ten days are up the consumer can collect the carpet or have it delivered. The same would apply in the case of a fitted carpet. It will not be good enough just to decide that one does not like the colour.

Similarly, it is important in the case of someone who is in high good humour after a victory in a by-election who, having had a few drinks, decides to buy a high class lawnmower but finds when he wakes up next day that he cannot pay for it or realises that he already has a lawnmower at home. That person has ten days to reflect on his purchase but that does not necessarily mean he has the use of the lawnmower in the interim. What we are talking about is withdrawal from the credit agreement, not returning the product when it is used or damaged. Deputy O'Keeffe will acknowledge that if the section can be operated sensibly there should be no difficulty and that it is a good idea that the consumer should have a cooling off period to reflect on the wisdom of a purchase made, perhaps, in the heat of the moment. This is no more than a prudent provision and I do not foresee it wrecking terrible damage to relations between consumers and traders.

Deputy Kitt raised the separate question of the necessity to communicate the contents of this Bill to the public at large. I am at one with him on that. This is the first such major consumer legislation in the history of the State. It is important, and its importance rests in the consumers knowing about it. There would be little point in debating it here, and the financial institutions and other interested groups being aware of its detail, if the public were not aware of the new rights it confers. I am conscious of that and I said on previous occasions that the Director of Consumer Affairs has planned an itinerary to advise people of the contents of this Bill. I presume that promotional literature in the form of easily accessible leaflets will be available to the public. I also mentioned on the last occasion that the intention to regionalise the office of the Director of Consumer Affairs is extant and that it is our intention as a Government to ensure that the director will be able to supply this kind of service in the regions, starting with Cork this year. I have no quibble with the points made. I am committed, as long as I have this responsibility, to ensuring that the public know about the new rights conferred on them by the Bill.

Amendment agreed to.

I move amendment No. 76a:

In page 38, to delete lines 43 to 45 and in page 39, to delete lines 1 to 5.

This amendment proposes the deletion of section 58 which provides that any sum payable by the hirer under a hire purchase agreement by way of a deposit or an initial down payment shall be treated as part of the hire purchase price. As Deputies will recall, amendment No. 10, which we discussed on 5 April, deleted the definition of "hire purchase price" from section 2. Amendment No. 77 reinstates a more detailed definition of "hire purchase price" in a stand alone section, section 60. That amended definition will combine the previous definition of "hire purchase price" with a requirement that the deposit form part of the hire purchase price. The purpose of this amendment is to avoid duplication with the new proposed section 60 defining the hire purchase price.

I welcome the Minister's decision to locate a regional office in County Cork. Given that there has been much talk about decentralisation I urge him to consider locating this office in Mallow which is more central within Munster than Cork city. He has an interest in Mallow although I would not like to advertise this fact. This would provide a boost to the town given that it has lost its racecourse and many industries.

Hire purchase agreements are very complex and usually the small print creates the crisis. The person who draws up the agreement will usually complete it and give a simple explanation but the many sections at the back of the form can have a devastating effect when difficulties and problems arise for the person who signed it. The conditions should be readable and easily understood by the hirer. Whereas the banks have expertise the ordinary punter does not.

Many people enter into three year agreements to purchase a car without considering the consequences and implications if they fail to make a number of repayments. It is not thoroughly explained in many cases when a person enters a three year agreement that they will have to make 37 payments — a down payment and 36 repayments. This takes from the value of hire purchase agreements. One of the reasons many people encounter difficulties is that the conditions were not properly explained. While they may be on good wages or the business is going well when they make the agreement as time goes on the position may deteriorate. It is important, therefore, that the conditions at the back of the agreement should be simplified, readable and throughly explained by the agent to the person concerned.

We have now moved on to deal with Part VI of the Bill——

What about Mallow?

I congratulate the Deputy who has not only managed to have Mallow included as a contender for one of the regional offices but also suggested that this might give a second lease of life to Mallow racecourse.

We have lost it. We might get something else instead.

I formally acknowledge this as a tender for the Cork office and I undertake to talk to the Director of Consumer Affairs——

As the Minister has a vested interest, he might reply to me after that.

If the racecourse can be reinstated some of the punters may need to gain access to the Director of Consumer Affairs, in terms of the activity engaged in there.

Will we have an office in Mallow?

The Deputy is correct; hire purchase agreements are complex and frequently the small print poses problems for the consumer. One of the more important merits of this legislation is that it provides for clarity and certainty and the provision of information to the consumer. There is nothing we can do about the consumer who chooses not to read it but the information is available and it is as intelligible and legible as we can make it.

The Deputy gave an excellent example, the 36 month contract involving 37 repayments. Very often the consumer does not plan for this and does not understand it but the amendment which states that any sum payable by a hirer under a hire purchase agreement by way of a deposit or an initial down payment shall be treated as part of the hire purchase price marks a definite step forward. That amendment, taken with the clarity required in the form of the agreement, greatly strengthens the position of the consumer. It may well be the case that the consumer will have to read a couple of extra pages as a result but all legislators can do is insert a provision in legislation to ensure that the consumer will have access to information. This will be policed by the Director of Consumer Affairs and it will be up to consumers to inform themselves after that.

Amendment agreed to.

We now come to amendment No. 76b. I observe that amendment No. 77b is consequential. I suggest, therefore, that we discuss amendment Nos. 76b and 77b together by agreement. Is that satisfactory? Agreed.

I move amendment No. 76b:

In page 39, between lines 5 and 6 to insert the following:

59.—(1) A hirer shall at any time before the final payment under a hire-purchase agreement falls due, be entitled to determine the agreement by giving notice of termination in writing to the owner or any person entitled or authorised to receive the sums payable under the agreement.

(2) Where a hire—purchase agreement has been determined under this section, the hirer shall, without prejudice to any liability has accrued before termination, have the option to either—

(a) pay the amount, if any, by which one-half of the hire purchase price exceeds the total of the sums paid and the sums due in respect of the hire-purchase price immediately before termination, or such less amount as may be specified in the agreement, or

(b) purchase the goods by paying the difference between the amount already paid under the agreement and the hire purchase price after the later amount has been reduced in accordance with section 52 or 53, or such lesser amount as may be specified in the agreement.

(3) Where a hire-purchase agreement has been determined under this section, the hirer shall, if he has failed to take reasonable care of the goods, be liable to pay for the failure.

(4) Where a hirer, having determined a hire-purchase agreement under this section, wrongfully retains possession of the goods, then in any action brought by the owner to recover possession of the goods from the hirer, the court shall, unless it is satisfied that having regard to the circumstances it would not be just and equitable so to do, order the goods to be delivered to the owner, without giving the hirer the option to pay the value of the goods.

(5) Nothing in this section shall prejudice any right of a hirer to determine a hire-purchase agreement otherwise than by virtue of this section.

In many respects this proposed section 59 contains provisions similar to those contained in section 61 of the present text. I am proposing the deletion of that section in amendment No. 77b in favour of the revised and resituated section 59 as proposed by amendment No. 76b.

This amendment has a twofold purpose: first, its aim is to repose the right of the hirer to determine a hire purchase agreement earlier and more logically with Part VI of the Bill. Essentially, it is being repositioned. It will follow after sections 59 to 62 as inserted by amendment No. 76. These sections set out the form and content of hire purchase agreements. Section 58 requires that owners who are party to a hire purchase agreement ensure that the agreement complies with the legislation, section 61 provides that hire purchase agreements which do not comply with the legislation are unenforceable. Section 59 provides that the Minister may, by regulation, amend the form and content of hire purchase agreements. Section 62 provides that the avoidance of certain provisions will render the agreement void. Otherwise the wording and intent are the same as the present section 61 which is being deleted by amendment 77b.

Second, it is designed to express more clearly the options for early settlement, be it voluntary or enforced, in the case of a hire purchase agreement. The provisions of section 59, which will be renumbered accordingly when the Bill is reprinted, will set out the hirer's right to terminate an agreement and the options available to him such as to pay the amount, if any, by which half the hire purchase price exceeds the total of the sums paid and the sums due up to date of termination or such less amount as may be specified in the agreement, or purchase the goods by paying the difference between the amount already paid under the agreement and the hire purchase price after the latter amount has been reduced in accordance with section 52 or section 53 or such lesser amount as may be specified in the agreement.

Section 59 states: "any guarantor shall be entitled to recover from the owner in an action all sums paid by him under the contract of guarantee or under any security given by him in respect thereof". Is that paragraph being deleted?

No, it is retained.

Am I right in saying that if I act as guarantor for a person and he fails to pay his dues. I may claim from him the money recovered from me?

That is my understanding of it.

That is very important provision. Many of us are well aware that guarantors have suffered severe hardship in that goods recovered had been damaged and the hire purchase company, as was its right under law, came down heavily on the guarantor.

I take it Deputy O'Keeffe is referring to normal contract law where the rights of the guarantor are stipulated by the contract applying, notwithstanding anything in this legislation. The paragraph to which the Deputy is referring relates to a case where the owner takes certain action which could adversely impact on the guarantor. This provision provides for such circumstances, but it applies to the owner, not the consumer. It is a little like putting up bail for a person and if that person jumps bail it is possible to hold the bailsman accountable but in the circumstances I do not know how meaningful that would be. Similarly with the consumer, it would depend on the circumstances. This measure provides for circumstances where the owner wrongfully repossesses the goods.

Amendment agreed to.

I move amendment No. 77:

In page 39, between lines 34 and 35, to insert the following—"60.—(1) In this Part `hire-purchase price' means the total sum payable by the hirer under the hire-purchase agreement in order to complete the purchase of the goods to which the agreement relates, exclusive of any sum payable as a penalty or as compensation or damages for a breach of the agreement.

(2) Where an owner has agreed that any part of the hire purchase price may be discharged otherwise than by payment of cash, any such discharge shall for the purposes of this Act, be deemed to be a payment of that part of the hire-purchase price.

(3) Any sum payable by the hirer under a hire-purchase agreement by way of a deposit or other initial payment, or credited or to be credited to the hirer under such an agreement or account of any such deposit or payment, whether that sum is to be or has been paid to the owner or to any other person or is to be or has been discharged by a payment of cash or by the transfer or delivery of goods or by any other means shall form part of the hire-purchase price.".

Amendment agreed to.

I move amendment No. 77a:

In page 40, between lines 8 and 9, to insert the following: "(5) Where an owner has recovered a part of the goods let under a hire-purchase agreement, and the recovery was effected in contravention of section 59, the provisions of this section shall not apply in relation to any action by the owner to recover the goods.".

Amendment agreed to.

I move amendment No. 77b:

In page 40, to delete lines 9 to 33.

Amendment agreed to.

I move amendment No. 78:

In page 40, between lines 41 and 42, to insert the following:

"64.—Where by virtue of a hire-purchase agreement a hirer is under a duty to keep the goods comprised in the agreement in his possession or control, the hirer shall, within 10 days of receipt of a request in writing from the owner inform the owner where the goods are at the time when the information is given or, if it is sent by post, at the time of the posting.".

Amendment agreed to.

I move amendment No. 79:

In page 40, between lines 41 and 42, to insert the following:

65.—Where goods of any class or description are let under a hire-purchase agreement to a dealer who deals in goods of that class or description and the dealer sells the goods when ostensibly acting in the ordinary course of his business, the sale shall be valid as if the dealer were expressly authorised by the owner to make the sale: Provided that the buyer acts in good faith and has not at the time of the sale notice that the dealer has no authority to make the sale.".

Amendment agreed to.

I move amendment No. 79a:

In page 40, after line 49, to insert the following:

"(2) Nothing in subsection (1) shall affect a claim for adverse conversion.".

Section 64 (1) which reproduces the provisions of section 11 of the Hire-Purchase Act, 1946, provides that where the owner proves that, before the commencement of an action to recover possession of goods from a hirer and after the right to recover had accrued, he wrote to the hirer requesting the surrender of the goods, the hirers' possession would be deemed to be adverse to the owner, for the purposes of the owner's claim to recover the goods.

This amendment, at the suggestion of the Attorney General's office, is that the owner's request for recovery of possession of the goods shall not affect the owner's claim for adverse conversion. A claim for adverse conversion would be a claim for damages. The amendment also reinstates the rider to section 11 of the Hire-Purchase Act, 1946, which used the terminology "a claim for damages for conversion".

Amendment agreed to.

I move amendment No. 79b:

In page 41, before line 1, to insert the following:

"65.—Where goods have been let under a hire-purchase agreement at any time after one-third of the hire-purchase price has been paid or tendered the owner makes a further hire-purchase agreement with the hirer comprising the goods, the provisions of sections 59 and 60 shall have effect in relation to that further agreement as from its making.

66.—If, whilst by virtue of this Part the enforcement by an owner of a right to recover possession of goods from a hirer is subject to any restriction, the hirer refuses to give up possession of the goods to the owner, the hirer shall not, by reason only of the refusal, be liable to the owner for the conversion of the goods.".

Two new sections are being inserted here, one relating to successive hire purchase agreements between the same parties and the second relating to the hirer's refusal to surrender goods in certain cases. These two sections are being inserted into the hire purchase provisions of the Bill on the advice of the Attorney General's office. The wording of section 65 is the same as in section 16 of the 1946 Act while section 66 corresponds to section 18 of that Act. We have effectively repealed the Act relating to hire purchase and as a result we have imported different sections of that Act into this Bill as appropriate — in other words, whatever section of the Bill is appropriate at any time. This amendment relates to two provisions in that regard.

Amendment agreed to.

I move amendment No. 80:

In page 43, line 10, to delete "to" where it firstly occurs.

This amendment relates to section 69 which deals with statements purporting to restrict the rights of the hirer. It applies specifically to subsection (1) (d) of that section. The purpose of the amendment is to delete the word "to" before the word "cause". It is a textual amendment removing the incorrect inclusion of the word "to". Section 69 1 (d), as amended, will read, "otherwise furnish or cause to be furnished a document including any such statement". It is no more than a tidying up provision.

Amendment agreed to.

I move amendment No. 81:

In page 44, to delete lines 44 to 48, in page 45, to delete lines 1 to 46, and in page 46, to delete lines 1 to 4, and substitute the following:

"75.—(1) A consumer-hire agreement and any contract of guarantee relating thereto shall be made in writing and signed by the hirer and by or on behalf of all other parties to the agreement, and—

(a) a copy of the agreement shall be—

(i) handed personally to the hirer upon the making of the agreement, or

(ii) delivered or sent by prepaid registered post to the buyer by the owner within 10 days of the making of the agreement,

and

(b) in the case of any contract of guarantee relating to the agreement, a copy of the guarantee and the agreement shall be—

(i) handed personally to the guarantor upon the making of the contract, or

(ii) sent within 10 days of the making of any contract by the seller to the guarantor.

(2) A consumer-hire agreement shall contain a statement of—

(a) the cash price of the goods to which the agreement relates,

(b) the amount of each instalment to be paid by the hirer under the agreement,

(c) the date, or the method of determining the date, upon which each instalment is payable,

(d) where the agreement is for a specified period—

(i) the number of instalments, and

(ii) the total amount payable under the agreement (including taxes),

(e) the name and address of the supplier of the goods to which the agreement relates,

(f) any additional costs to be paid,

(g) the cost of any early termination by the hirer of the agreement,

(h) the names and addresses of all parties to the agreement at the time of its making, and

(i) any costs or penalties to which the hirer will become liable for any failure by the hirer to comply with the terms of the agreement.

(3) A consumer-hire agreement shall contain a list of the goods to which the agreement relates sufficient to identify them.

(4) A consumer-hire agreement shall contain a notice, which is at least as prominent as the rest of the contents of the agreement, to the effect that the agreement is for the bailment of goods which remain the property of the owner.

(5) A consumer-hire agreement shall contain, in respect of the cooling-off period, a statement that the hirer—

(a) has a right to withdraw from the agreement without penalty if the hirer gives written notice to this effect to the seller within a period of 10 days of the date of receipt by the hirer of a copy of the agreement, or

(b) may indicate that he does not wish to exercise this right by signing a statement to this effect, this signature to be separate from, and additional to, the hirer's signature in relation to any of the terms of the agreement.

(6) A consumer-hire agreement shall contain a statement to the effect that a hirer is obliged to give the owner information under section 80 as to the whereabouts of the goods to which the agreement relates.

(7) A consumer-hire agreement shall contain in a prominent position the words `Consumer-hire agreement"

"76.—An owner shall not be entitled to enforce a consumer-hire agreement or any contract of guarantee relating thereto or any right to recover the goods from the hirer, and no security given by the hirer in respect of money payable under the consumer-hire agreement or given by a guarantor in respect of money payable under such contract of guarantee as aforesaid shall be enforceable against the hirer or guarantor by any holder thereof, unless the requirements specified in section 75 have been complied with:

Provided that if a court is satisfied in any action that a failure to comply with any of the aforesaid requirements, other than section 75 (1), was not deliberate and has not prejudiced the hirer, and that it would be just and equitable to dispense with the requirement, the court may, subject to any conditions that it sees fit to impose, decide that the agreement shall be enforceable.

"77.—The Minister may make regulations in relation to the form and content of consumer-hire agreements and in so doing may amend or modify section 75 and the references contained in section 76.

"78.—An owner who is a party to a consumer-hire agreement shall ensure that the contents of the agreement comply with section 75 and any regulations made under section 77.".

This, too, is an extensive amendment. The new format of consumer hire agreement replaces that in the existing section 75 of the Bill. It does not differ from the existing format in any material way, it sets it out in a clear and logical way. This new format will make a consumer hire agreement more comprehensible and intelligible to the consumer.

The consumer hire agreement and any contract of guarantee must be made in writing, signed by the consumer, given to the consumer at the time of making the agreement or delivered within ten days of making the agreement, contain a statement of a coolingoff period, a statement of the names and addresses of the parties to the agreements, comparative price information, amount and frequency of instalments, a list of the goods covered, any cost or penalties in the event of failure to comply with the agreement, a notice that the agreement is for the bailment of goods which remain the property of the owner and a notice that it is a consumer hire agreement and a requirement that the hirer gives information on the whereabouts of the goods.

As in the case in hire-purchase agreements, the new section 76 provides that the owner shall not be able to recover the goods subject to the consumer hire agreement unless the consumer hire agreement conforms to the requirements of section 75. However, in harmony with the provisions relating to other agreements, the consumer hire agreement may be enforceable if it can be shown to the court that any failure to meet the requirements of section 75 was not deliberate.

The new section 77 empowers the Minister to make regulations as regards the form and content of the consumer hire agreements and, in doing so, may amend or change the provisions of section 75 and the references in section 76.

Section 78 imposes an obligation on the owner of the goods who is party to the transaction to ensure that the consumer hire agreement is in accordance with section 75.

At present consumer hire agreements are not regulated. It would be instructive if I read an extract, from the 1990 annual report of the Director of Consumer Affairs, which makes the case very well as to why it is now necessary to introduce specific controls on consumer hire transactions.

I am aware Deputy Tom Kitt signalled an interest in this section which, effectively, is a new part of the Bill, Part VII which deals with consumer hire agreements. The difference in a consumer hire agreement under the Bill is that the ownership of the article rests with the credit institution, finance house or whichever institution provided the loan. The normal example of such an agreement is that of a car purchased through a local garage in respect of which there is an arrangement with a finance house. The usual format of the agreement up until now has been that of a consumer hire arrangement. I know Deputy Kitt has an interest in this matter.

I wish to put on the record the views of the Director of Consumer Affairs on this issue which Deputy Kitt may consider contentious.

The 1990 Annual Report of the Director of Consumer Affairs states that in response to a situation which had brought about a dramatic slump in new car sales, various participants in the motor industry, manufacturers, distributors and retailers, in conjunction with various financial institutions, produced leasing schemes for personal purchasers of motor vehicles. Most of these leasing schemes have as their objective the eventual acquisition by the lessor of the motor vehicle, even though, largely for fiscal reasons, this was not stated in the actual detailed lease document. Many problems have arisen with this type of leasing or lease-purchase arrangement. The report outlines the main difficulties encountered by consumers. Many consumers do not appreciate the difference between a lease and a loan arrangement — the term finance is commonly used by salesmen and consumers. Sometimes this is done deliberately to mislead the consumer, in other cases the consumers may mislead themselves. Many consumers do not realise that a car on lease cannot be sold by them and this leads to difficulties sometimes involving repossession from the new owner. There can be difficulty with buy-out terms if the consumer wants to get out of the lease in order to dispose of the vehicle. These buy-outs can be very expensive and several consumers have employed solicitors to negotiate settlement terms. There can be large balloon payments at the end of a lease which must be paid before ownership of the vehicle is transferred. These are very often under a separate agreement to avoid the whole arrangement being treated as hire-purchase. There is a tax difference depending on whether it is treated as hire purchase or consumer hire. Sometimes other arrangements apply to avoid balloon payments, for example, step-up payments where the amount to be paid increases every year. Rates of payment are sometimes quoted on a net of VAT basis or as being so much per month plus VAT. This is a carryover from business leasing where the amount of VAT is very often a recoverable item. Consumers often do not get the benefit of competition among the leasing companies. There is some evidence that while consumers are offered a fixed lease rate, the salesman carries out an auction among potential lessors. This results in his being paid the difference between the lowest bidder and the fixed rate already offered to the consumer. The consumer credit regulations do not apply to leasing and so the consumer has no way of making comparisons and judging what is the best deal available.

The last comment is no longer valid as it will apply when this legislation is enacted.

I thank the Minister for his reply. As he is aware, I mentioned earlier that members of the Society of the Irish Motor Industry expressed a view on this aspect of the Bill and I brought it to his attention. I would like the Minister to respond to their view that the Bill will kill leasing as a means of car finance. In putting that view I am asking the Minister to respond as members of that society have lobbied me and others extensively on this aspect. I am representing their view, but I am not necessarily agreeing with everything they say. They consider leasing the cheapest means of finance.

I appreciate the comment of the Director of Consumer Affairs to which the Minister referred, but they claim that leasing is a popular form of finance with more than 100,000 new and second-hand cars being sold annually under that system of finance. They claim also that they fully support transparency in transactions and are keen to co-operate in every possible way. However, they consider this legislation will eliminate what they consider the cheapest and most popular form of car finance. They claim also that if leasing is eliminated the banks will be able to cherry pick the consumers to whom they will extend hire purchase type arrangements. They have argued forcibly with me, and with Deputies O'Rourke, Ned O'Keeffe and others. I ask the Minister to respond to their argument, of which I know he is very much aware, since they put it clearly in writing to him.

I too met the Society of the Irish Motor Industry and studied the more important of their arguments at some length. The point on which Deputy Tom Kitt is focusing is their central claim which posits circumstances in which leasing, as we know it, will be no more or, as Deputy Kitt said, this Bill will kill off.

I was concerned about that possibility in as much as it seems that a leasing arrangement can be advantageous to the consumer. Therefore, if the impact of the Bill was to diminish the number of transactions on this lease basis, it would be the consumer who could conceivably lose out. As a result, I have requested that extensive work be carried out on this section. At the end of that, the argument is not being represented quite fairly. For example, commercial leasing is not included here, which would constitute approximately half the number to which Deputy Tom Kitt referred of the 100,000 transactions.

It does not impact on that but, more important, it may well be that we are seeking some diminution of the leasing instrument but not as a result of this Bill.

I discovered in recent days that the real issue here is the application of the Seventh VAT Directive. The SIMI see themselves caught in a double whammy, on the one hand, of the enactment of this Bill and, on the other, the Seventh VAT Directive with which the Minister for Finance is currently dealing in Select Committee, that really is the issue. I accept that the Seventh VAT Directive will make consumer hire purchase agreements, that is leasing, less attractive; there is no doubt about that. There is also no doubt but that we do not have any alternative but to implement that directive, for all of the reasons of which the House will be aware.

The Director of Consumer Affairs had this to say in commenting on the matter:

Most of these leasing schemes have as their objective the eventual acquisition by the lessor of the motor vehicle even though, largely for fiscal reasons, this was not stated in the actual detailed lease document.

"Fiscal reasons" there means tax reasons. Therefore, the argument revolves around the question of which is the more tax efficient, hire purchase or leasing. The position to date has been that leasing has been the more tax efficient but it is the Seventh VAT Directive which will effectively put an end to that.

Until now credit institutions buying second-hand goods for leasing purposes from sellers, dealers, garages and so on, have paid a VAT-inclusive price for such goods. However, under the present VAT arrangements, they can claim a credit or offset such against their total monthly or bi-monthly liability to VAT. The effect of the Seventh VAT Directive is that they will no longer be able to claim or offset that credit. Consequently, this increased and unavoidable cost will have to be passed on to the hirer, thus making leasing more expensive and less attractive for second-hand goods. Another point that should be sewn into the record of the House is that it does not affect new vehicles but rather applies to second-hand goods. That is the position under the EU VAT directive and there is no point in my seeking to pretend otherwise.

Similarly, I would say to the Society of the Irish Motor Industry that there is no point in their arguing with me that it is as a result of what we are doing in this Bill. The Society of the Irish Motor Industry was involved in the discussions on this Bill from a very early stage, long before it was published, I think in 1992 they were taken through its provisions. Yet there is no record in my Department of any disquiet having been expressed by them at any stage since those discussions in 1992.

Therefore, the Seventh VAT Directive has changed everything. I met representatives of the finance houses who, of course, have an interest in this matter. They represent the other side of the coin from what Deputy Tom Kitt raised — he said the SIMI represents the garages whereas the finance houses provide the funding. That group raised with me the question of the Sixth VAT Directive, the manner of implementation of which has meant that, while the finance houses also had to pay the VAT-inclusive price, they could not offset or reclaim the VAT. This has rendered hire purchase more expensive and less attractive than leasing. What is being said here is that the manner of implementation of the Sixth VAT Directive has rendered leasing a more attractive option than hire purchase since the introduction of the Seventh VAT Directive effectively removes that advantage of leasing over hire purchase.

From our meeting last evening with the finance houses, I am also aware that they have been making representations to the Minister for Finance, to his Department and the Revenue Commissioners about the manner of application of the Sixth VAT Directive. I do not know what will be the response of the Minister for Finance to that argument but, if we could posit a circumstance in which he would make any changes, assuming that he is enabled to do so, this comparative advantage of leasing over hire purchase would no longer exist. We might well then have the finance houses devising new instruments in order to facilitate the throughput of business from members of the SIMI in garages and so on.

I appreciate Deputy Tom Kitt raising this important issue. I assure him we have agonised somewhat on this since it was brought to our attention, but what I have said is about as fair an exposition as I can make about the issue.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

Debate ended on amendment No. 81 in the name of the Minister.

A Cheann Comhairle——

I would be glad to call the Deputy normally, but the Minister of State had replied to the debate. I will allow a query from the Deputy.

The motor industry consider leasing arrangements much more attractive and cheaper than hire purchase or loan finance. The Minister of State referred to EU and VAT directives, but leasing arrangements provide tax breaks that give financial people an opportunity to offer consumers a more attractive interest rate and as a result they face lower repayments on their purchases. Will the Minister explain why leasing will not be covered under the Bill and that hire purchase and loan finance——

I am anxious to facilitate the Deputy and to apply some latitude in this area, but he should not expect the Chair to call the Minister to speak again. He has already replied to the debate on amendment No. 81. Deputy O'Keeffe may have an opportunity to comment on the matter at a later stage. As it would not be in accordance with procedure, I am reluctant to call the Minister again.

Amendment agreed to.

I move amendment No. 82:

In page 46, line 6, to delete "75" and substitute "74".

This amendment relates to section 76 which stipulates that many of the provisions relating to hire purchase agreements, that is letting by description, implied undertakings to quality, samples, statements purporting to restrict the rights of the hirer, exclusion of implied terms and conditions, liability on persons conducting negotiations antecedent to the agreement, application of certain of the existing hire purchase legislation and antecedent negotiations and representations, shall also apply to consumer hire agreements. Section 76 also implies that the goods are free of any charges or encumbrances and shall remain in the quite possession of the hirer, which is a legal way of saying the hirer keeps them.

The provisions relating to hire purchase agreements which we have dealt with at length are being transposed to apply in the case of consumer hire agreements. The amendment does not have an effect beyond that.

Amendment agreed to.

I move amendment No. 83:

In page 46, line 6, to delete "letting".

This also relates to section 76. The removal of the word "letting" by means of this amendment does not, on the advice of the Attorney General's office. diminish or change the intent and purpose of section 76. From reading the section it is clear that the agreement referred to is a consumer hire agreement. Therefore, the word "letting", which is not defined in the Bill, is superfluous.

The effect of section 76 is to provide the hirer with similar protection to that afforded under a hire purchase agreement. In terms of equality of rights under the two different types of agreement, the word "letting" is superficial and redundant.

Amendment agreed to.

I move amendment No. 84:

In page 46, to delete lines 22 to 27 and substitute the following:

"(1) An advertisement in which a person offers to arrange for the bailment of goods under a consumer-hire agreement or indicates the availability of such a bailment shall include a statement to the effect that the agreement is for hiring or leasing only and the goods remain the property of the owner,".

This amendment relates to section 78 which deals with the advertising of consumer hire agreements. It refers to the exchanges between Deputy Kitt and I about SIMI who expressed concern about the implications of the Bill requiring the inclusions of an additional 31 words in an advertisement. SIMI stated on that, on the one hand, it would confuse the consumer and, on the other, it would be more expensive. I am happy to say fewer words are now required. Nevertheless, the consumer will be provided with much needed and valuable protection. For the information of Deputy O'Keeffe, the words to be inserted in the advertisement are, "the agreement is for hiring or leasing only and the goods remain the property of the owner,". If the Deputy was in the business he would have to promulgate those words only. This should go some way towards meeting the argument put forward by SIMI.

Amendment agreed to.

I move amendment No. 85:

In page 46, after line 46, to insert the following:

"80.—A hirer shall, within 10 days of receipt of a request in writing from the owner of the goods let to the hirer under a consumer hire agreement, inform the owner where the goods are at the time when the information is given or, if it is sent by post, at the time of posting.".

Amendment agreed to.

I move amendment No. 86:

In page 47, lines 3 and 4, to delete "where a credit agreement is a money lending agreement" and substitute "to moneylending agreements".

This change of wording on the advice of the Attorney General's office is designed to bring out more clearly the purpose of section 80 of the Bill which provides that Part VIII of the Bill applies to moneylending agreements or transactions of a nature which are substantially moneylending. Again, the purpose is clarity.

Amendment agreed to.

I move amendment No. 87:

In page 47, lines 6 and 7, to delete "having taken due regard of any objection by a third party to the issue of a licence," and substitute ", having considered any objection to the granting of a licence,".

This amendment entails a change of wording, its purpose being to express more clearly the intent of section 81, which deals with the application to and the grant by the Director of Consumer Affairs of moneylending licences. The wording now proposed expresses more forcefully and positively what the Director's position will be in considering objection from any party to the granting of a moneylending licence.

Amendment agreed to.

I move amendment No. 87a:

In page 47, line 11, to delete "in any particular District Court District or Districts" and substitute "in any district court district or in any particular district or part thereof".

The purpose of this amendment is clarity. The present text of section 81 refers to an applicant seeking a licence to engage in the business of moneylending in any particular District Court district or districts. The Attorney General's office has now pointed out that this wording lacks the required precision and, to remedy this, it has proposed new wording. Thus the moneylending licence granted by the Director shall specify the District Court district or any particular district or part thereof where the applicant may engage in moneylending. It is basically a tidying up exercise.

Amendment agreed to.

We now come to amendment No. 87b. I observe that amendments Nos. 87b and 87f are related and I suggest we discuss them together, by agreement.

I move amendment No. 87b:

In page 47, between lines 12 and 13, to insert the following:

"(2) A person who intends to apply to the Director for a moneylenders licence shall before making such application cause to be published, in any national or local newspaper published in the State and circulating in the district court district that the applicant intends to engage or engages in the business of moneylending, notice of his intention.".

This amendment requires an applicant for a moneylenders licence to place an advertisement in a national or local paper, published in Ireland and circulating within the District Court district in which the applicant intends to engage in or is already engaged in moneylending, advising of the applicant's intention to seek a moneylenders licence.

While section 81 (v) required the applicant to submit such an advertisement to the Director as part of the licence application procedure, there was no specific provision in the Bill, until now, requiring the applicant to place an advertisement of this kind. In other words, although the applicant was required to send in a copy of the advertisement, there was no requirement in the first place to so advertise and this amendment corrects that.

The purpose of this amendment is to give any interested parties advance notice that the person intends to apply for a moneylender's licence. Those interested parties may then advise the Director of any objection to the application which they may have. Section 81 (1) provides that the Director shall take due regard of any objections. This procedure would be similar to that applying in the case of a gaming or an intoxicating liquor licence.

Section 81 (2) (a) (vi) required that an applicant include with the application "a copy of an advertisement in one of the newspapers circulating in that area of the applicant's intention to apply for said licence and giving such other details as the Director may require". However, there was no specific provision in the Bill for such an advertisement to be published. This amendment corrects that omission.

Amendment No. 87f replaces the original reference in subsection (2) (a) (v) to the advertisement. It rewords the requirement that a copy of the advertisement now be required under subsection (2) be included with the licence application.

Amendment agreed to.

I move amendment No. 87c.:

In page 47, line 14, after "writing" to insert "and".

This is a textual amendment to correct the omission of the word "and" from subsection (2) (a) which provides that "An application for a moneylender's licence shall be in writing and in such form as the Director may determine...".

Amendment agreed to.

I move amendment No. 87d:

In page 47, between lines 15 and 16, to insert the following:

"(i) the true name and the business name (if any) of the applicant,

(ii) the name under which the applicant intends to engage in or engages in the business of moneylending,

(iii) the address of any premises in which the applicant proposes to engage or engages in the business of moneylending,".

This amendment inserts into the Bill the requirement that an applicant applying for a moneylender's licence must supply the following information which is additional to the six items already specified in subsection (2) (a) of section 81:

(i) the true name and the business name (if any) of the applicant,

(ii) the name under which the applicant intends to engage in or engages in the business of moneylending,

(iii) the address of any premises in which the applicant proposes to engage or engages in the business of moneylending,".

Thus the application information requirements are being brought into line with the information which the Director shall cause to be specified in the moneylender's licence.

Subsection (7) (a) to (c) of section 81 requires this information to be contained in the licence.

Amendment agreed to.

I move amendment No. 87e:

In page 47, line 22, after "engage" to insert "or engages in".

Again, this is a tidying up amendment. The words "engages in" are being included within subsection (2) (a) (iv) and this will now read: "the name of the District Court district in which the applicant proposes to engage or engages in the business of moneylending". It might be somebody already in the business.

Amendment agreed to.

Amendment No. 87f has already been discussed with No. 87b. I call on the Minister of State to formally move the amendment.

I move amendment No. 87f:

In page 47, to delete lines 24 to 27, and substitute the following:

"(v) a copy of any advertisement placed by the applicant as required under subsection (2),".

Amendment agreed to.

I move amendment No. 87g:

In page 47, to delete lines 42 to 45, and substitute the following:

"(5) A person shall not wilfully give any information which is false or misleading in respect of an application for a moneylenders licence.".

This amendment shall have a twofold effect. First, subsection (5) concerning the duty of the moneylender to display a copy of the licence and any terms and conditions attached thereto in his business premises is being deleted in this subsection of the Bill. It is being reinstated under amendment No. 96a at line 53 on page 49. At present, it is not in its most appropriate position in the Bill. It is also now being replaced by a new provision whereby a person seeking a moneylenders licence shall not give any false or misleading information. This new provision shall guard against applicants who may not be truthful or who may be only partly truthful in the information they supply in support of the application.

Amendment agreed to.

I move amendment No. 87h:

In page 48, between lines 16 and 17, to insert the following:

"(8) The holder of a moneylender's licence shall only engage in the business of moneylending in the name specified in the holder's licence.".

This amendment inserts a new provision in section 81 stipulating that the holder of the moneylending licence shall only engage in the business of moneylending in the name specified in the licence. The amendment aims at curtailing any practice, particularly by collection agents, of licence holders from operating their own loan books, a not uncommon practice. It also represents an additional safeguard for such people to engage in illegal moneylending.

Amendment agreed to.

Amendment No. 88 is a drafting amendment. I observe that No. 89 is related and I am suggesting that we discuss amendments Nos. 88 and 89 together if that is satisfactory.

I move amendment No. 88:

In page 48, line 32, to delete "or".

These two textual amendments relate to the present subsection (8) of section 81 which deals with the grounds on which a Director may refuse to grant a moneylender's licence. The word "or" between subsections (8) (d) and (8) (e) should not be there and is now being deleted. In subsection (8) (e) the word "that" is also being deleted. It will now read: "the applicant or any person responsible or proposed to be responsible for the management of his business in relation to moneylending is by order of a court disqualified from holding a licence".

Amendment agreed to.

I move amendment No. 89:

In page 48, line 33, to delete "that".

Amendment agreed to.

I move amendment No. 89a:

In page 48, line 37, after "is not" to insert "or is no longer".

The insertion of this new reason for the director to refuse a licence is to cater for a situation where a holder of a licence has engaged in conduct not becoming or fitting to the practice of moneylending. I know Deputy Ned O'Keeffe will remember that phraseology "conduct not becoming", it is enshrined in the rules of some organisation that I seem to remember.

The Minister has a long memory.

This amendment remedies an omission from the text and was proposed to me by the office of the Attorney General.

Amendment agreed to.

I move amendment No. 90:

In page 48, line 41, to delete "unfair." and substitute the following:

"unfair, or

(h) in the case of an application for a second or subsequent moneylenders licence, the applicant did not engage in the business of moneylending according to the terms or conditions of the previous licence.".

Amendment No. 90 deletes the word "unfair" and effectively substitutes a new section. It also inserts a new ground on which the director can refuse a licence. In this instance the application would not have adhered to the terms and conditions attaching to licences additional to the primary licence. These additional licences relate to second and subsequent District Court districts or parts thereof where the moneylender also carries on the business of moneylending.

This amendment remedies an omission from the text and was proposed by the office of the Attorney General.

Amendment agreed to.

I move amendment No. 91:

In page 49, to delete lines 1 to 53, and substitute the following:

"(9) The Director may—

(a) suspend or revoke a moneylenders licence, or

(b) vary the terms or conditions of a moneylenders licence,

on the grounds that any of the provisions of subsection (8) or any of the terms or conditions attached to the licence are no longer being complied with.

(10) Whenever the Director proposes to refuse to grant, suspend, revoke or vary the terms or conditions of a moneylenders licence he shall notify the applicant or the holder of the licence, as the case may be, of his proposal and shall, if any representations are made to him in writing by such applicant or holder within 14 days of the notification, consider the representations.

(11) Whenever the Director, having considered any representations that may have been made under subsection (10), decides to refuse to grant, suspend, revoke or vary any term or condition of a moneylenders licence, he shall notify the applicant for, or as the case may be, the holder of, the licence of the decision and the grounds for such decision and such applicant or holder may within 7 days of receipt of notification appeal against such decision to the judge of the Circuit Court within whose Circuit the business of moneylending to which the licence relates is to be carried on.

(12) A notification referred to in subsection (10) or (11) shall be delivered personally or sent by pre-paid registered post to the business address of the applicant for a moneylenders licence or the holder of the moneylenders licence concerned, as the case may be.

(13) Where a notification under subsection (10) or (11) relates to a refusal to grant a second or subsequent moneylenders licence or a suspension or revocation of a moneylenders licence or the variation of the terms or conditions of a moneylenders licence, the refusal, suspension, revocation or variation shall take effect upon the expiration of the 7 days allowed for the appeal.

(14) Where an appeal is made under subsection (11) by an applicant for a second or subsequent moneylenders licence in respect of a refusal to grant such licence or by a holder of a moneylenders licence in respect of a suspension, revocation or variation of the terms or conditions of a moneylenders licence, the refusal, suspension, revocation or variation shall stand suspended until the appeal is determined or withdrawn and notwithstanding subsection (6) any moneylenders licence held by the applicant at the time of the appeal shall continue in force until the determination or withdrawal of the appeal.

(15) On the hearing of an appeal under subsection (11) in relation to a decision of the Director to refuse to grant, suspend, revoke or vary the terms or conditions of, a moneylenders licence, the Circuit Court may either confirm the decision or allow the appeal and, where an appeal is allowed, the Director shall grant the licence or shall not suspend, revoke or vary the terms or conditions of the licence, as the case may be.

(16) A decision of the Circuit Court on an appeal under subsection (11) shall be final save that, by leave of the Court, an appeal from the decision shall lie to the High Court on a specified question of law.

(17) In an appeal under subsection (11) the Director shall not be awarded or ordered to pay costs.".

The text of page 49 which continues the list of provisions relating to a moneylender's licence in section 81 is being deleted. I will deal with the new provisions ad seriatim and relate them in so far as they are applicable to the provisions on page 49. The new subsection (9) corresponds in large measure to subsection (10) and includes for the first time a reference to non-compliance with subsection (8) as a grounds for refusal. In summary, the licence may be revoked or varied by the director for failure to meet any or all the requirements in subsection (8), as amended, or any of the terms or conditions attached to the licence.

Subsection (10) extends the provisions of subsection (11) to the director's refusal to grant a moneylender's licence. Consequently, where the director proposes to refuse to grant a licence, or proposes to suspend, revoke or vary the terms or conditions of a current licence, he must notify the applicant or the holder of the licence, as appropriate, of his proposal. Such applicant or holder is entitled to make, within 14 days of receipt of the notification, representations to the director in respect of his proposal.

Subsection (11), similar to subsection (12) of the present text, provides that, if having considered any representations made under subsection (10), the director decides not to grant the licence or decides to suspend, revoke or vary any term or condition of an existing licence, he shall notify the holder or the applicant of the decision and the grounds on which he has based his decision. The holder or applicant may, within seven days of receiving the notification, appeal the decision to the Circuit Court.

The provisions of subsections (12) and (13) replace subsection (17). Any notification made under this section from the director must be delivered personally or sent by prepaid registered post to the business address of the licence holder or applicant. Subsection (13) provides that where the notification refers to a suspension, revocation of a licence or to the variation of terms of conditions of a licence, such a refusal, suspension or variation shall take effect seven days after receipt of the notification.

Amendment agreed to.
Amendments Nos. 92 to 96, inclusive, not moved.

Recommittal is necessary in respect of amendment No. 96a in the name of the Minister.

Amendments Nos. 96f and 96v are related and it is proposed that amendments Nos. 96a, 96f and 96v be discussed together, by agreement. Is that agreed? Agreed.

Bill recommitted in respect of No. 96a.

I move amendment No. 96a:

In page 50, before line 1, to insert the following:

"82.—The holder of a moneylenders licence shall display in a prominent position a copy of the licence and any terms or conditions attached thereto in any premises where the holder engages in the business of moneylending.

83.—A moneylender shall ensure that any moneylending agreement to which he is a party shall contain in a prominent position the words `moneylending agreement'.

84.—(1) A person, other than the Director or an officer of the Director acting on behalf of the Director, shall not alter or attempt to alter a moneylenders licence.

(2) A person shall not falsify or attempt to falsify a moneylenders licence.

85.—(1) A holder of a moneylenders licence shall issue, in writing and in such form as may be specified by the Director, to any person engaging in the business of moneylending on his behalf, at a place other than a business premises of the holder used for moneylending, authorisation to so engage, signed by or on behalf of the licence holder.

(2) An authorisation issued under subsection (1) shall cease to have effect should the moneylender who issued it cease to be the holder of a moneylenders licence.

(3) A person shall not engage in the business of moneylending on behalf of the holder of a moneylenders licence at a place other than the business premises of the holder unless he holds an authorisation issued under subsection (1).

(4) A person shall not alter, deface or falsify or attempt to alter, deface or falsify an authorisation issued under subsection (1).

(5) In any proceedings for an offence for contravening subsection (3) it shall be a defence for the accused to show that he had reasonable grounds to believe that any authorisation issued to him to engage in moneylending on behalf of a moneylender was bona fide issued under this section and in force.".

The purpose of amendment No. 96f is to delete lines 18 to 22, inclusive, on page 50, to effectively delete section 83. This is provided for in the previous amendment No. 96a and does not require to be replicated there.

Amendment No. 96v relates to lines 33 and 34 on page 53 and would require the insertion of a new section. Line 14 would add to that section "and arrest any such person who the member has reason to believe has contravened any provision of this Part". That has to do with search warrants and it was felt that it was inadequate in that the power of arrest ought to be conferred.

I am not impressed by moneylenders or moneylending. Has a moneylender a right to ask for security? Does the moneylender have to be present in person when he is lending money or can he appoint an agent? It is in order for a moneylender to advertise in a prominent place and show his licence but can he have a faceless person represent him?

The licensee does not have to be present but his agent is required to show that he is acting for an authorised moneylender. The Deputy will recall that we deal with the case where part of a rent book would be taken over by an agent and we have tried to protect against that. As regards security, if the Deputy is asking if it is permissible for the moneylender or his agent to be accompanied for protection purposes when collecting money, the Bill does not deal with that. However, he is entitled to take whatever measures he considers necessary for his personal safety.

Does the moneylender or his agent have the right to ask the person obtaining the loan for a personal security or guarantee? In a hire-purchase agreement the consumer must have a guarantor. If I borrow £300 from a moneylender is he entitled to ask for a security? In the past, moneylenders took pension books and children's allowance books for security. I know that was dealt with and such exploitation was condemned by all sides of the House, but has a moneylender the right to seek other forms of security?

He is entitled to ask for it but there is nothing in the Bill that confers it. The market we are talking about, by definition, comprises people who do not have access to conventional orthodox moneylending as evidenced in the banks or lending institutions. It is by virtue of their inability to put up collateral that the moneylending business thrives. However, the moneylender may not repossess a pension book or whatever and that is specified elsewhere in the Bill.

Another area of concern is the rate of interest charged and the terms of repayment. What right has the consumer to ensure that the moneylender or his agent does not call to the consumer's home and request that the loan be repaid on demand if there is rumour that the person who borrowed the money is not in a position to repay? Does the Minister consider that the moneylender should advertise or make known the interest rate being charged? In many cases moneylending is exploitation at its worst because the interest charged is well above the going rate. Will the Minister consider making it obligatory for moneylenders to advertise the rate they charge?

To take the Deputy's first point, if the moneylender were to conduct himself in that fashion it would contravene the moneylending agreement, the format of which we have gone through and would constitute an offence. What the Deputy is talking about is tantamount to extortion. As regards the second point there is no ceiling on interest rates provided for in the Bill as it stands. I received many representations to restore the ceiling that existed. Many of the groups dealing with property argued that it should be reinserted in the Bill.

When Deputy O'Rourke was on this side of the House I raised that point with her and she made a number of arguments against it, including the one that she felt the ceiling would become the floor. As it is structured at present the director will determine this. He has expressed the view that he wants flexibility to continue to have that power. I do not think any Minister would want to have that power because, by definition, the interest rate we are talking about will be much higher than that on the high street for the reasons we have stated — the cost of collection, the nature of moneylending and so on. The director feels the power best reposes in him. It is my understanding that he will take steps to ensure that is promulgated and that the moneylender and client are fully aware of it.

I accept that it is a risk business but those who go into this business are aware of that. We can identify what money costs if we borrow from financial institutions. They add on a margin based on risk. We know their wholesale rate and, in many cases, their retail rate but those who borrow from moneylenders, by and large, would not be financed by the institutions I mentioned. They are entitled to protection. There should be a ceiling on the rate. It is not sufficient to have the Director of Consumer Affairs Act as a watchdog because he would have to wait for a case to be put to him.

I come from a rural constituency where moneylending would not be a major problem but I am aware of cases where 100 per cent interest was charged. I do not wish to prejudice what the Minister of State said but we are aware of cases where persons were sent to people who borrowed money from moneylenders. They were in difficulty and had to borrow elsewhere to repay the moneylender. There should be some protection for the consumer by inserting a ceiling on the interest rate. Failing that, the consumer should be able to see the interest rate charged on the money borrowed.

I accept that this is an important point. To some extent we are going over arguments which were debated extensively on Committee Stage. The current flat rate of 39 per cent has been more honoured in the breach than in the observance. I do not think people really knew that the rate was 39 per cent. In the very small number of cases where there were prosecutions the rate was found to be many times higher than 39 per cent; in some cases it was higher by a factor of five, ten or more. Somebody in extremis is not really all that concerned about the rate. All they want to do is get their hands on a few hundred pounds and to do this they are prepared to overlook the interest rate. As Deputy O'Keeffe rightly said, that may well be the attitude of a consumer in extremis but it is not good enough for us to ignore it and not address it.

I have examined this argument which I made in Opposition. I met the antipoverty networks which comprised a number of organisations and which argued that a figure ought to be included. I also discussed the matter with the Director of Consumer Affairs who is much happier that the power ought to be reposed in him. He may have to vary it depending on the market but given that he is the supervisor, regulator, watchdog and enforcer in this area he believes the power is best left with him. At this stage he has persuaded me that this is probably the best option.

Amendment agreed to.
Amendment reported.

I move amendment No. 96b:

In page 50, between lines 5 and 6, to insert the following:

"(2) A person shall not engage in the business of moneylending on behalf of a moneylender who is not the holder of a moneylender's licence.".

This amendment seeks to close off a loophole in section 82 which deals with the prohibition on engaging in the business of moneylending without a licence. It states that a person shall not engage in the business of moneylending on behalf of a moneylender who is not the holder of a moneylending licence. This will close off a possible loophole in the moneylending provisions whereby a person acting on behalf of an unlicensed moneylender would be acting outside the provisions of the Bill. Amendment No. 96a provides that a licensed moneylender shall issue a written authorisation to persons who engage in the business of moneylending on his behalf. The amendment will close a loophole we did not pick up first time round.

That is the point I was making. I agree that a moneylender should have to give written authorisation to persons who engage in money-lending on his behalf.

I am confused by the wording of the amendment which states that "a person shall not engage in the business of moneylending on behalf of a moneylender who is not the holder of a moneylender's licence". One could interpret this in another way, that the person acting on behalf of the moneylender must have a moneylender's licence himself. Is the Minister saying that an agent acting on behalf of a moneylender does not need a licence? That word "who" could refer to the person or the moneylender.

The construction Deputy Molloy has put on the amendment escapes me. I do not see how this could possibly be the position. I take the point made by Deputy O'Keeffe. I thought he was referring to the moneylender. The person authorised by him must have written evidence of the authorisation. The same applies in the case stipulated by Deputy Molloy — the agent must have written authorisation from the moneylender who must have a moneylender's licence. The question of him acting as an agent would not arise if he had a moneylender's licence himself. If there is any ambiguity in the amendment I will examine it, but I cannot see it. In reply to Deputy O'Keeffe, if a person is challenged he must be able to produce evidence of the written authorisation.

Amendment agreed to.

I move amendment No. 96c:

In page 50, line 8, to delete "subsection (1)" and substitute "this section".

This is a tidying up amendment which relates to section 82 which deals with the prohibition on engaging in the business of moneylending without a licence. The amendment applies to subsection (2) which deals with the situation where a member of the Garda Síochána has reasonable cause to suspect that a person is engaged in moneylending without a licence or is operating a moneylending business from his place of residence. He will be able, without a warrant, to stop and question the person and search for the document. If the powers conferred by the section are to be effective we have to make this change.

Amendment agreed to.

I move amendment No. 96d:

In page 50, line 9, after "search" to insert "(if need be by force)".

This amendment also relates to section 82 concerning the prohibition on engaging in the business of moneylending without a licence. The effect of this amendment will be that if a garda is experiencing obstruction in the exercise of his various functions of stopping, questioning and/or searching a person whom he has a reasonable cause to believe is engaged in the business of moneylending without a licence he can use force, if necessary, to execute these functions. There is little point conferring these points on the Garda unless they can be reasonably expected to carry them out. This representation has been made to us and I am minded to recommend it to the House.

Amendment agreed to.

I move amendment No. 96e:

In page 50, between lines 11 and 12, to insert the following:

"(3) A person shall not obstruct or interfere with a member of the Garda Síochána acting under subsection (2).".

Amendment No. 96e addresses the same section of the Bill. Here again the amendment concerns a prohibition on engaging in the business of moneylending without a licence as provided in section 82. This is a new subsection and expressly provides that persons shall not obstruct a member of the Garda in performing his or her functions under this section. The raison d'etre is the same as that given for the previous two amendments.

Amendment agreed to.

I move amendment No. 96f:

In page 50, to delete lines 18 to 22.

Amendment agreed to.

We come to amendment No. 96g. Amendments Nos. 96g, 96h, 96i, 96l, 96n to 96t, inclusive, 99a and 99b are cognate. The suggestion is that amendments Nos. 96g, 96h, 96i, 96l, 96n to 96t, inclusive, 99a and 99b be discussed together. Is that satisfactory? Agreed.

I move amendment No. 96g:

In page 50, line 23, to delete "consumer" and substitute "borrower".

There is nothing more involved than substituting "borrower" for "consumer". While we have tended to use the word "consumer" it is considered that the word "borrower", as we are dealing with moneylending, is more appropriate. In this Part relating to moneylending agreements, the word borrower may be more relevant than, perhaps, the more formal term consumer. As a consequence of these amendments I will be tabling in the Seanad a revision to the definition of borrower.

There is no great difference between a borrower and a consumer. Consumer is a broader term. Will the Minister say why he has opted for "borrower" rather than "consumer"?

Neither a borrower nor a lender be. I do not suppose in honesty it is a matter of great importance. In fairness I would refer Deputy O'Keeffe to the provision dealing with house loans where the term used there is not consumer but borrower. What is good for the goose is good for the gander. We are not talking about consuming a product but what is normally a cash loan. The term borrower is probably more appropriate on balance.

Amendment agreed to.

I move amendment No. 96h:

In page 50, line 30, to delete "consumer" and substitute "borrower".

Amendment agreed to.

I move amendment No. 96i:

In page 50, line 44, to delete "consumer" and substitute "borrower".

Amendment agreed to.

I move amendment No. 96j:

In page 51, between lines 7 and 8, to insert the following:

"(x) the date, or the mode of determining the date, upon which each repayment instalment is payable,".

This amendment relates to section 85 which is concerned with the repayment book used in connection with money-lending transactions. The new subsection inserts this new requirement which must be reflected in the repayment book. Thus, the repayment book must now, inter alia, include the date or the mode of determining the date, for example, the last Monday of each month, when each repayment instalment is payable. This provision was unwittingly omitted from the present and earlier texts of the Bill and is being addressed on the advice of the Attorney General's office.

Amendment agreed to.

We come to amendment No. 96k. Amendment No. 96m is related. It is suggested that amendments Nos. 96k and 96m be taken together. Is that satisfactory? Agreed.

I move amendment No. 96k:

In page 51, to delete lines 20 to 23, and substitute the following:

"(1) A moneylender shall, in respect of every moneylending agreement, made after the commencement of this section, to which the moneylender is a party, keep a record of the agreement which shall include the following information:".

This amendment relates to section 86 which provides for certain records to be maintained by the moneylender in respect of each agreement entered into by him. Amendment No. 96k rewords the existing subsection (1) and states the requirement on the moneylender to keep details of the agreement in clearer terms. Amendment No. 96m reproduces the requirement for such records to be maintained for five years — previously contained in subsection (1) — as a stand alone subsection of section 86. Both amendments have the effect of redrafting the lay out of subsection (1) without in any manner changing the intent.

Amendment agreed to.

I move amendment No. 96l.

In page 51, line 26, to delete "consumer" and substitute "borrower".

I thank my colleague for working so assiduously on this Bill this afternoon. As I arrived too late to hear why the Minister decided to change the term borrower to consumer will he explain the reason?

This is the kind of discussion Deputy O'Rourke and I had the previous day about various redrafting changes.

Perhaps the Minister will be brief as we should not be proceeding in this manner.

The difference between borrower and consumer is, I suspect, a matter of judgement. I do not think it is a matter of great moment. I am advised that since we are talking about money-lending that borrower is the more appropriate term. As I said to the Deputy's colleague, Deputy O'Keeffe, if we look at the section dealing with house loans and mortgages the term used is borrower. It is not breaking any new ground. On balance, borrower is the more formal term.

Amendment agreed to.

I move amendment No. 96m:

In page 52, between lines 4 and 5, to insert the following:

"(2) A moneylender shall retain a record kept under subsection (1) for a period of not less than 5 years after the final repayment instalment under the agreement.".

Amendment agreed to.

I move amendment No. 96n:

In page 52, line 11, to delete "consumer" and substitute "borrower".

Amendment agreed to.

I move amendment No. 96o:

In page 52, line 15, to delete "consumer" and substitute "borrower".

Amendment agreed to.

I move amendment No. 96p:

In page 52, line 18, to delete "consumer" and substitute "borrower".

Amendment agreed to.

I move amendment No. 96q:

In page 52, line 26, to delete "consumer" and substitute "borrower".

Amendment agreed to.

I move amendment No. 96r:

In page 52, line 29, to delete "consumer" and substitute "borrower".

Amendment agreed to.

I move amendment No. 96s:

In page 52, line 31, to delete "consumer" and substitute "borrower".

Amendment agreed to.

I move amendment No. 96t:

In page 52, line 33, to delete "consumer" and substitute "borrower".

Amendment agreed to.

I move amendment No. 96u:

In page 53, line 14, after "this Part" to insert "and arrest any such person who the member has reason to believe has contravened any provision of this Part".

This amendment relates to search warrants covered by section 90. It provides for giving powers of arrest to a member of the Garda Síochána where he or she has reason to believe a person or persons are engaged in any action which contravenes Part VII of the Bill. Deputies on all sides of the House are aware of the nefarious and wanton behaviour of those who are engaged in illegal moneylending. I am sure I have the support of all Deputies for the increased powers being here reposed in the Garda.

From whence did this amendment come? Although one would, in general, always wish to uphold the law and give every power necessary to those who execute the law on our behalf, one always has reservations about powers such as this. The Garda Síochána are very well able to carry out their business, and adding this to the Bill is just tautology and is leaning on the side of "heavy gang" tactics.

I am a bit taken aback to be accused of being associated with the inclusion of a "heavy gang" style measure in legislation. The straight answer to Deputy O'Rourke's question is that it is here on the recommendation of the Attorney General's office. However, it is not a full answer to say that as there have been representations. I would be interested in Deputy O'Rourke's view as to why I am subjected still to such extensive representations on this Bill. The Deputy knows as well as I that it is sometimes difficult to make up one's mind on the balance of arguments being made, but it has been represented to me that if we give powers of search to the Garda, they have to be seen to be effective, and what we have all sought to stamp out or at least minimise is illegal moneylending. The licensed or authorised moneylenders are providing a service. Many of the poverty groups would say that without them some people would not have access to credit. If they were to go to a bank or orthodox financial institution, they would not get it. What we are talking about here is illegal moneylenders and it is considered that the section is not really effective to cope with that.

Members of the Garda cannot just exercise the powers willy-nilly but must have reasonable grounds as set out in the section. That is the paternity of the amendment and I honestly do not think it is overstepping the mark. It is necessary and I ask the House to agree to it.

Amendment agreed to.

I move amendment No. 96v:

In page 53, lines 33 and 34, to delete "from the holder of a moneylenders licence to collect repayments on the licence holder's behalf and substitute "issued under section 85".

Amendment agreed to.

I move amendment No. 96w:

In page 53, lines 39 and 40, to delete "section, section 82, section 91 or 92" and substitute "Part".

This amendment seeks to extend the scope of section 93, which details the Garda's powers of arrest in the event of contravention of section 93, the section 92 prohibition on engaging in the business of moneylending without a licence, the section 91 prohibition on having possession of documents belonging to another person for moneylending or the section 92 obligation to produce to members of the Garda moneylenders licence and authorisation, to contravention of the whole of this Part dealing with moneylending agreements.

I oppose this amendment. The powers the Minister is seeking to include in this case are draconian and unnecessary and the Minister has given no argument to the House which would justify making this change at this late stage of the long debate on this Bill. The Minister has not justified the Garda being given the power to arrest somebody without a warrant if, in his or her opinion, that person has contravened any requirement of Part VIII which contains many requirements of moneylenders some of which could be deemed merely book-keeping, such as, giving dates etc.

If a clerical error is made by a moneylender or an agent working on his behalf the Garda Síochána could, under this proposal, arrest that person without a warrant. The previous amendment to section 90 relates to the power of the Garda to arrest in the event of being granted a warrant by the District Court. In this instance we are seeking to extend the power of the Garda to arrest a person without a warrant for any transgressions of the requirements of this Part of the Bill. This is not justifiable. Deputy O'Rourke referred to the heavy gang: I do not know to whom she was referring but I doubt if the Garda want this power——

That is what I meant.

It is strange if the recommendation has been made at this late stage by the Attorney General.

Under the original proposal if a moneylender operated without a licence the Garda would have the power to arrest them without a warrant. We are now seeking to extend this power of arrest without a warrant for any misdemeanours and transgressions of the requirements of section 85 which states that a moneylender shall, in respect of every moneylending agreement, supply to the consumer or the borrower a book or document in which to record repayments made under the agreement which shall be completed and maintained by the moneylender in accordance with the section and shall be separate from the agreement.

It places the following requirements on a licensed moneylender: he shall, in respect of a moneylending agreement, enter in a repayment book before supplying it to a consumer the following information: an agreement number or other reference to enable the agreement to be identified, the name and address of the moneylender as specified on his moneylender's licence, the name and address of the borrower, the amount of the credit being advanced and the date the credit is advanced. It seems that if the moneylender inadvertently inserts the wrong number, address or date a garda will have the power to arrest him without a warrant.

The amount of each repayment instalment must also be included. It seems that if the moneylender inadvertently includes the wrong amount, even though there was no criminal intent, he will be dealt with as if he were a criminal and arrested without a warrant. To comply with proper bookkeeping procedures a moneylender will also be obliged, correctly, to include the amount of each collection charge, if any, and the number of repayment instalments. It seems that if he includes the figure nine instead of ten or 11 he will be arrested.

Why is the Minister seeking such draconian powers in respect of any transgressions of the sections in this Part of the Bill? This power was originally confined to the relevant sections which place the most important requirements on moneylenders. I support the provisions in sections 82, 91, 92 and 93 which provide that a person may be arrested without a warrant for any transgressions of the requirements of these sections but it is excessive and unnecessary to provide for this power in each of the sections — 80 to 90, inclusive — contained in Part VIII of the Bill.

Section 85 deals with the repayment book while section 86 requires a moneylender to maintain a record of the agreement which he shall retain for a period of five years. This should include certain information, including names and addresses, date of repayment, the rate of interest, the amount of each collection charge, if any, the number of instalments and the total amount payable in respect of the loan. Agents working on behalf of licensed moneylenders will be frightened out of their lives in maintaining such records.

If a garda or inspector in the course of an investigation discovers inaccuracies or contraventions one would expect that they would have the power to take action. The appropriate action is not to arrest the person concerned immediately on the spot; rather the garda should first seek to make his case before a district justice and obtain a warrant. I appeal to the Minister to reconsider.

As this is Report Stage, unfortunately, I can speak only once. I find this discussion disturbing in the sense that a raft of amendments was only made available this morning and the House has rushed into discussing them without the spokesperson for my party being given an opportunity to study them. We would have liked an opportunity to give them due consideration. This is not the appropriate way for the House to do its business. There is a sad history in relation to legislation which was rushed through this House in this manner. That type of legislation has a tendency to bounce back.

I do not know if the Government is so short of legislation that it had to rush in with something to fill the time allocated for the Oireachtas today but it is extraordinary that while the Finance Bill is being discussed by the Select Committee on Finance and General Affairs the Minister is seeking to proceed with this Bill. I wish to protest on behalf of my party.

I will be opposing the section unless I receive a coherent and justifiable explanation. The amendment is far too broad and excessive. It is both unnecessary and an extreme measure. The Minister has not justified his position in bringing forward such a draconian measure.

Before the Deputy Leader of my party entered the House I had marked this section and section 90 which deals with search warrants. This is a contentious issue. The section, which gives far-reaching powers, has been described as draconian and heavy-handed.

Deputy Molloy dealt with this matter thoroughly. If, through no fault of the agent or moneylender, an error is made in making calculations or a wrong date is inserted, action may be taken. We must find middle ground. Why was this proposal not included in the Bill as originally drafted? There has been much talk about civil liberties and while I do not have much time for moneylenders, we must be seen to be fair and honourable. It is important to bring in fair legislation.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

If a person who borrows money from a moneylender dislikes that moneylender, it would be easy to find an error in the agreement. They may say the notice displayed in the office was not properly sited or that matters were not properly explained, and in those circumstances it is easy to obtain a search warrant. We are obliged to protect all parties and that is what we are doing. I share the view of my colleagues in the Opposition that the powers are far-reaching. It has been said also that they are draconian and heavy-handed. I appeal to the Minister to reconsider this matter. I would like him to tell the House from where the idea came.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

There is genuine concern about this section, particularly the provision regarding search warrants — this matter will be of interest to the other side of the House. Licensed moneylenders should not be treated too harshly in the event of procedural irregularities or problems in the office. If the person involved or his agent is not well liked it may be easy to find an error in the application or agreement. Fault could be found in many areas. Litigation is the order of the day in this modern world and people are becoming more conscious of it. Where people are convicted there is usually a greater follow up of claims for damages for personal injuries.

This section is far-reaching and the amendment would be damaging to the Bill. The Bill was widely acclaimed and its drafting was the foresight of the former Minister of State at the Department of Enterprise and Employment, Deputy O'Rourke. I am aware that a good amount of midnight oil was burned and a great deal of work went into its drafting. It is regrettable that the Bill might be blemished in any way by this type of section. It is frightening to hear Deputy Molloy, whom I know well, refer to it as draconian.

We are all nervous of incidents involving money in the times in which we live. I appeal to the Minister, whom I consider reasonable and is a person whom I admire to amend that section and make it more acceptable to the Opposition and the consumer. This fine Bill was introduced for the purpose of dealing with bank charges because consumers were alarmed and annoyed at what was happening. We have dealt with many other contentious sections and amendments and we have given broad approval to most of the provisions. I appeal to the Minister to make the amendment more acceptable and if he does we will not challenge it.

There has been general consensus on the Bill dating back to the time when I was Minister and Deputy Rabbitte was in Opposition. At that time we had a good deal of jousting, but there was much co-operation. When I was reading the amendment I recalled that as Minister I resisted pressure to include a similar amendment. The powers of the law are rigorous and that is as it should be and one cannot seek to overstep them in any respect. Will the Minister of State reconsider the matter?

I have listened carefully to what has been said during the course of the debate on this section. I will deal first with some of the extraneous points. Deputy Molloy is being excessively conspiratorial if he believes the Bill is before the House today for any of the reasons he posited. It is about time we concluded the debate——

I did not give any reasons.

——having regard to the fact that it had its genesis in 1992.

We did not have time to consider the amendments.

I am somewhat surprised that Deputy Molloy, a former Minister, reasserts that point. The amendments were published last night in the time honoured tradition. I belong to a party of similar size to deputy Molloy's and I have often been caught in the situation which affected his party today.

(Interruptions.)

Let us hear the Minister of State without interruption.

I understand the pressures that imposes on a small party. However, with due respect to Deputy McDowell whom, as the House is aware, I hold in high regard, if this Government were to schedule its business to facilitate——

The Minister is being facetious.

It is a serious point. This was committed to long before we knew the Committee Stage of the Finance Bill——

It is not acceptable to table amendments in the morning and ram them through in the afternoon.

Let us hear the Minister of State without interruption.

——was scheduled for this week. This is the way matters will be dealt with under the committee system and Deputy Molloy does not appear to accept that point. Various committees of the House will be sitting simultaneous to the operation of this Chamber which is the whole point of the committee system. Up to now legislation had to be channelled through this Chamber and could not be teased out on Committee Stage outside of here.

Minister, is it not common courtesy to give the Opposition at least one day to consider the amendments?

Deputy Molloy must desist from interrupting.

I am being misrepresented by the Minister for State.

Please desist, Deputy Molloy.

The amendments were published in the time honoured fashion.

I received them this morning, and that was not in time-honoured fashion.

When Deputy Molloy was in Government he did precisely the same thing and no other meaning should be attached to it.

I never supported that.

Deputy Molloy will have to accept that under Dáil reforms which this Government has accelerated, pressures on all Members will be greater than was the case heretofore. That may pose problems regarding location in the case of small parties and that is one of the drawbacks of the committee system.

That is not the point I was making.

I noted what the Deputy said.

I said that we should get due time to consider the amendments. That is a reasonable point and I am surprised that the Minister of State——

Deputy Molloy is getting the same time to consider them that he gave me when he was in Government.

I never accepted that.

The Deputy operated it.

He operated it and that is the net point.

I am expressing my objection to it and I would have expected the Minister of State to support me on that.

Deputy Molloy cannot continue to pepper the Member in possession with interruptions like this.

That is a lovely verb.

That is exactly what he is doing. The Deputy may not continue to do it while I occupy this Chair.

I started today by commending my predecessor on the extent to which she was open to accepting amendments from the Opposition and the extent to which the Bill was improved as a result. The Bill has been changed beyond recognition and my predecessor, Deputy O'Rourke, deserves much credit for that. I went on to say that I propose to do precisely the same thing and to introduce extensive amendments which I have been doing all day. I do not want to invite any acrimony from Deputy Molloy and, therefore, I will not stress the point, but if he prompts me further I will explain to him in some detail what I mean.

On this amendment, I do not wish to be associated in any way with draconian powers given to the Garda Síochána. However, I must be conscious that the reality of illegal money-lending is such that the gardaí require whatever assistance they can get to effectively combat that scourge.

Deputy Molloy suggested that if the amendment had gone no further than the existing provision in section 82, which refers to a prohibition on engaging in the business of money-lending without a licence, section 91 which relates to prohibition of having possession of documents belonging to another person for money-lending or section 93 which refers to an obligation to produce to members of the Garda Síochána——

We must proceed to Private Members' Business. I should be obliged if the Minister of State, Deputy Rabbitte, would move the Adjournment of the debate.

I was about to indicate that I am favourably disposed to taking on board the arguments advanced by Deputies O'Rourke, Molloy and Ned O'Keeffe. However, I should like to have time to deal with these arguments in terms of the specific sections——

The Minister will appreciate the position of the Chair.

I am still in possession but I will be withdrawing the amendment.

Debate adjourned.
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