Central Bank (Supervision and Enforcement) Bill 2011: Report and Final Stages

Amendments Nos. 1 to 4, inclusive, are related and will be discussed together.

I move amendment No. 1:

In page 9, line 24, to delete “section 87” and substitute the following:

section 5, in so far as it relates to Schedules 3 and 4, and sections 72 to 75, 77 to 83 and 85 to 88”.

Amendments Nos. 1 to 4, inclusive, are drafting amendments to Part 1 of the Bill. They simply correct cross-referencing issues.

Amendment agreed to.

I move amendment No. 2:

In page 10, line 5, to delete "Schedule" and substitute "Schedules".

Amendment agreed to.

I move amendment No. 3:

In page 10, line 16, to delete "section" and substitute "section 24".

Amendment agreed to.

I move amendment No. 4:

In page 11, line 39, to delete "4" and substitute "5".

Amendment agreed to.
Amendment No. 5 not moved.

Amendments Nos. 6 to 11, inclusive, are related and may be discussed together.

I move amendment No. 6:

In page 13, line 32, to delete "skills necessary relating to the business of the reviewee to" and substitute the following:

"skills relating to the business of the reviewee necessary to".

Amendments Nos. 6, 7, 9 and 10 are drafting amendments to Part 2 of the Bill, which relates to the provisions of the report to the bank. Amendment No. 8 arises out of a discussion on Committee Stage on section 18, which makes it an offence to provide false or misleading information to a reviewer in the preparation of a report under Part 2. During the discussions on Committee Stage, Deputy Doherty raised the point that there was a need to provide for a specific offence where the reviewer deliberately includes false or misleading information in his or her report. While the Minister stated at the time that the Central Bank general enforcement powers would apply, I am accepting the Opposition proposal and inserting a specific provision for such an offence under section 18. This addresses the issue raised in amendment No. 11, tabled by Deputy Doherty.

I welcome the inclusion of the Government amendments. Amendment No. 11, in my name, deals with the same issue, which I raised on Committee Stage. I am glad the Minister of State has accepted my point because, in the past, it could have been the case that the reviewer could have also been working with the institution to provide false information to the Central Bank. The legislation now provides clarity, which I welcome. Since the Minister of State has accommodated me in amendments Nos. 6 to 10, my amendment, No. 11, does not need to be moved.

Amendment agreed to.

I move amendment No. 7:

In page 16, line 9, to delete "or".

Amendment agreed to.

I move amendment No. 8:

In page 16, line 12, after "respect," to insert the following:

"or

(c) is a reviewer and in relation to the preparation of a report under this section gives information to the Bank which the reviewer knows to be false or misleading in a material respect,".

Amendment agreed to.

I move amendment No. 9:

In page 16, line 15, to delete "months" and substitute "months,".

Amendment agreed to.

I move amendment No. 10:

In page 16, line 18, to delete "years" and substitute "years,".

Amendment agreed to.
Amendment No. 11 not moved.

Amendments Nos. 12 to 19, inclusive, are related and may be discussed together.

I move amendment No. 12:

In page 17, line 6, to delete "himself or herself" and substitute "itself".

Amendments Nos. 12 to 18, inclusive, are all drafting amendments. Amendment No. 19 inserts a new provision into the information Part entitled "Use of information". In the course of performing its functions under the Central Bank Acts, the Central Bank receives information through a variety of means, including statutory measures requiring the provision of information, information obtained by an authorised officer in the course of an inspection, and information obtained through the receipt of regulatory returns. The information Part of the Bill amalgamates the consolidated authorised officer powers with the information-gathering powers of the Central Bank across all its statutory measures requiring the provision of information. Amendment No. 19 simply provides that any information received or held by the Central Bank or an authorised officer may be used by the bank for any of its statutory functions. I was not present for the discussion on this on Committee Stage, as Deputy Doherty knows, but I am aware that the Minister for Finance indicated he would table this amendment as a means of making it clear to all concerned that information could be used across a number of sectors. Amendment No. 19 attempts to provide for this.

I have no issue with these drafting amendments.

Amendment agreed to.

I move amendment No. 13:

In page 19, line 14, to delete "earlier" and substitute "earliest".

Amendment agreed to.

I move amendment No. 14:

In page 20, line 25, to delete "over".

Amendment agreed to.

I move amendment No. 15:

In page 20, line 39, after "records" to insert "so".

Amendment agreed to.

I move amendment No. 16:

In page 22, line 39, to delete "times, within" and substitute "times within".

Amendment agreed to.

I move amendment No. 17:

In page 24, line 38, to delete "request from an authorised officer" and substitute "requirement".

Amendment agreed to.

I move amendment No. 18:

In page 25, line 13, to delete "request from an authorised officer" and substitute "requirement".

Amendment agreed to.

I move amendment No. 19:

In page 25, between lines 38 and 39, to insert the following:

34.—Information acquired by the Bank or an authorised officer in the performance of any functions conferred on the Bank or the authorised officer under financial services legislation may be used by the Bank for the purposes of the performance of any of its functions under financial services legislation.".

Amendment agreed to.

Amendments Nos. 20 to 25, inclusive, are related and may be discussed together.

I move amendment No. 20:

In page 26, line 23, to delete "relevant".

These amendments are drafting amendments to Part 4 of the Bill, which deals with auditor assurance.

Amendment agreed to.

I move amendment No. 21:

In page 26, line 28, to delete "evidence" and substitute "information".

Amendment agreed to.

I move amendment No. 22:

In page 26, line 32, to delete "under or by virtue of" and substitute "by or under".

Amendment agreed to.

I move amendment No. 23:

In page 27, line 4, to delete "(7) Before making" and substitute "(8) Before making".

Amendment agreed to.

I move amendment No. 24:

In page 27, line 7, to delete "(8) In specifying" and substitute "(9) In specifying".

Amendment agreed to.

I move amendment No. 25:

In page 27, line 8, after "with" to insert "which".

Amendment agreed to.

Amendments Nos. 26 to 31, inclusive, are related and may be discussed together.

I move amendment No. 26:

In page 29, between lines 22 and 23, to insert the following:

"(4) (a) The Governor shall provide a report to the Central Bank Commission at least annually on any action taken or not taken in response to protected disclosures.

(b) The Central Bank Commission shall determine the form and content of the report to be provided under paragraph (a).".

Amendments Nos. 26 to 31, inclusive, are related to Part 5 of the Bill in respect of protection for persons reporting breaches. During the Committee Stage proceedings, Deputy McGrath asked whether there ought to be an onus on the Central Bank to act on whistleblowing disclosures. In response, the Minister stated that an obligation to act in all cases may be disproportionate, but that he would consider an obligation to report to the Central Bank Commission on action taken on disclosures. Amendment No. 26 inserts a new subsection (4) into section 37 requiring the Governor to prepare a report for the Central Bank Commission on action taken or not taken on foot of protected disclosures received. It is also provided that the Central Bank Commission shall determine the scope, form and content of that report. This will allow the Central Bank Commission to pitch the report at the appropriate level of detail to provide accountability while allowing it scope to waive reporting of routine or otherwise non-material information.

Amendment No. 28 also arises from the discussion on Committee Stage, where the Minister, Deputy Noonan, accepted the point made by Deputy Doherty that in the event of a person's identity being disclosed under the whistleblowing regime in Part 5 of the Bill, he or she would be notified first. The amendment provides that it is sufficient for the Central Bank to make all reasonable efforts to notify the person to cover the possibility that the person may not be contactable and that this should not prevent investigations, inquiries etc. Amendments Nos. 27 and 29 to 31, inclusive, are all drafting amendments.

I thank the Minister of State for his note on those amendments. They are improvements on what was in the original Bill. I am glad that the position we put on Committee Stage has been agreed to, in particular regarding whistleblowers and offering them respect while at the same time ensuring it does not curtail the necessary investigations. I am happy to support the amendments.

Amendment agreed to.

I move amendment No. 27:

In page 30, line 22, to delete “investigations and hearings” and substitute “an investigation or hearing”.

Amendment agreed to.

I move amendment No. 28:

In page 30, between lines 24 and 25, to insert the following:

“(6) Before disclosing a person’s identity in accordance with subsection (5), the Bank shall make all reasonable efforts to notify the person.

Amendment agreed to.

I move amendment No. 29:

In page 31, line 6, to delete “months” and substitute “months,”.

Amendment agreed to.

I move amendment No. 30:

In page 31, line 9, to delete “years” and substitute “years,”.

Amendment agreed to.

I move amendment No. 31:

In page 31, line 43, to delete “months” and substitute “months,”.

Amendment agreed to.

Amendments Nos. 32 to 35, inclusive, are related and may be discussed together.

I move amendment No. 32:

In page 36, line 11, to delete “securing” and substitute “ensuring”.

These are all drafting amendments to Parts 7 and 8 of the Bill dealing with the Central Bank's powers to give directions and make regulations.

Amendment agreed to.

I move amendment No. 33:

In page 36, line 35, to delete “any”.

Amendment agreed to.

I move amendment No. 34:

In page 36, line 40, to delete “any” and substitute “such”.

Amendment agreed to.

I move amendment No. 35:

In page 41, lines 21 and 22, to delete all words from and including “and” in line 21 down to and including “given” in line 22 and substitute the following:

“, the form and frequency of such statements and the manner in which such statements are to be given”.

Amendment agreed to.

Amendments Nos. 36 to 41, inclusive, are related and may be discussed together.

I move amendment No. 36:

In page 45, to delete lines 12 to 15 and substitute the following:

“(9) Where the Court is satisfied, because of the nature or the circumstances of the case or otherwise in the interests of justice, that it is desirable, the whole or any part of proceedings before it under this section may be heard otherwise than in public.”.

These are all drafting amendments to Part 9 of the Bill relating to the enforcement section. Amendment No. 39 is an amendment to section 53 of the Bill dealing with restitution orders. The restitution provisions contained in the Bill will allow the Central Bank to apply to the High Court for a restitution order against any person who has been unjustly enriched or caused another person to suffer loss or detriment as a result of committing a contravention of the financial services legislation.

Upon such an application being made, the High Court may order the person concerned to pay to the Central Bank such sums as the High Court deems appropriate, having regard to the extent to which the person has been unjustly enriched or another person has suffered loss or detriment. The Central Bank may then make a distribution of this money to any person who has suffered loss or detriment in accordance with the directions of the High Court.

The provisions currently allow for restitution only with respect to persons found to have committed a contravention through the Central Bank's administrative sanction regime, as outlined in Part III(C) of the Central Bank Act 1942. Separate regimes also exist for the purposes of various securities laws and regulations necessarily separate due to the subject matter of those regulations.

There is every reason why someone guilty of a contravention of the prospectus, market abuse or transparency directives should also be liable to a restitution action on the same basis as those guilty of a contravention under other provisions of Irish financial services law generally. For that reason, the scope of the mechanism proposed is being widened to bring such regimes within the restitution regime.

Amendment agreed to.

I move amendment No. 37:

In page 45, line 33, to delete “, himself or herself”.

Amendment agreed to.

I move amendment No. 38:

In page 45, lines 37 and 38, to delete “, himself or herself”.

Amendment agreed to.

I move amendment No. 39:

In page 45, line 46, to delete “1942, or” and substitute the following:

“1942,

(b) on whom any sanction has been imposed under:

(i) Regulation 99 of the Prospectus (Directive 2003/71/EC) Regulations 2005 (S.I. No. 324 of 2005),

(ii) Regulation 41 of the Market Abuse (Directive 2003/6/EC) Regulations 2005 (S.I. No. 342 of 2005), or

(iii) Regulation 67 of the Transparency (Directive 2004/109/EC)Regulations 2007 (S.I. No. 277 of 2007),

or,”.

Amendment agreed to.

I move amendment No. 40:

In page 46, line 26, to delete “supply” and substitute “provide”.

Amendment agreed to.

I move amendment No. 41:

In page 46, line 39, to delete “supplied” and substitute “provided”.

Amendment agreed to.

Amendment No. 42 arises out of committee proceedings.

I move amendment No. 42:

In page 47, between lines 25 and 26, to insert the following:

55.—(1) In a trial on indictment of an offence under financial services legislation,

the trial judge may order copies of any of the following documents to be given to

the jury in such form as the judge considers appropriate:

(a) any document admitted in evidence at the trial;

(b) the transcript of the opening speeches of counsel;

(c) any charts, diagrams, graphics, schedules or agreed summaries of evidence produced at the trial;

(d) the transcript of the whole or any part of the evidence given at the trial;

(e) the transcript of the closing speeches of counsel;

(f) the transcript of the trial judge’s charge to the jury;

(g) any other document that, in the opinion of the trial judge, would be of assistance to the jury in its deliberations including, where appropriate, an affidavit by an accountant or other suitably qualified person summarising, in a form which is likely to be comprehended by the jury, any transactions by the accused or other persons which are relevant to the offence.

(2) If the prosecutor proposes to apply to the trial judge for an order that a document mentioned in subsection (1)(g) shall be given to the jury, the prosecutor shall give a copy of the document to the accused in advance of the trial and, on the hearing of the application, the trial judge shall take into account any representations made by or on behalf of the accused in relation to it.

(3) Where the trial judge has made an order that an affidavit by an accountant or other person mentioned in subsection (1)(g) shall be given to the jury, the accountant or, as the case may be, the other person so mentioned—

(a) shall be summoned by the prosecutor to attend at the trial as an expert witness, and

(b) may be required by the trial judge, in an appropriate case, to give evidence in regard to any relevant procedures or principles within his or her area of expertise.

This amendment provides for the insertion into the Bill of a new section relating to the provision of information to juries in the trial and indictment of offences under the financial services legislation. It is modelled on similar provisions in the Companies Acts.

It provides that, in a trial on indictment of an offence under financial services legislation, the court may order that copies of a range of documents may be provided to members of the jury. The documents include any documents admitted in evidence, transcripts of the opening speeches of counsel, testimony given by witnesses and the judge's charge to the jury, as well as any charts, diagrams, graphics and summaries of evidence produced at the trial.

In particular, they may include an affidavit of an accountant summarising any transactions by the accused relevant to the alleged offence. The purpose in providing that copies of such documents may be given to members of the jury is to facilitate its assimilation and deliberation of issues before the courts which in many cases can be complex and complicated.

Provision is also contained in the section to ensure that where the prosecution proposes to apply to have a copy of the document given to the jury, it will first have to provide a copy to the accused who may make representations to the courts as to whether the document in question should in fact be provided to the jury. In addition, the court may order in the case of an affidavit of an accountant that the person making the affidavit attends and explains to the jury any relevant accounting procedures or principles.

The need for such provisions in other regulated sectors has been acknowledged and legislated for. To date, no like provisions have been introduced in the financial services sector. The objective of the amendment, which was discussed on Committee Stage, is to give the jury, which has to come to a decision in complicated, difficult and complex cases, all of the information it needs to come to the decision that is required, and to do so in a user friendly way which helps it in its deliberations. I understand this mirrors statutes in other aspects of Irish commercial law where this has been required to help juries to get a full understanding of the cases that come before them.

Amendment agreed to.

Amendments Nos. 43 to 71, inclusive, are related and may be discussed together.

I move amendment No. 43:

In page 48, between lines 22 and 23, to insert the following:

“ ‘debt collector’ means a person who for remuneration collects or seeks to collect consumer credit debt;”.

This deals with debt collectors, as does amendment No. 70. Debt collectors are currently unregulated and need to be brought into the fold. Recently the Society of St. Vincent de Paul warned of a potential money lending crisis as more and more people turn to them to make ends meet. Some research suggests that half of households go into debt to pay regular bills.

As the Minister of State knows, I introduced proposed legislation to cap the extortionate rates of interest moneylenders charge. We know some APRs are up to 187%. Many people will end up in the hands of debt collectors, as distinct from moneylenders, who remain unregulated.

The Central Bank's code of conduct on mortgage arrears looks set to remove the limit on the frequency with which borrowers in arrears may be contacted by lenders. The Free Legal Advice Centres pointed out in their submission on the review of the code that the Central Bank should immediately prioritise the regulation of debt collection on a statutory basis, with a proper licensing system and a code of conduct applying to such entities. A suitable vehicle for this might be the Bill before us today, which was referred to the select committee on 26 October 2011. It is curious that a Bill ostensibly designed to improve the regulation of financial service providers by the Central Bank should have been allowed to stall in this manner. The core sentiment of the Free Legal Advice Centres is that the activities of debt collectors must be regulated and this is the appropriate legislation in which to provide for same.

My amendment No. 43 proposes the inclusion in section 57(b), which provides several definitions of terms referred to in the legislation, of a definition of "debt collector". I welcome the inclusion of debt management firms within the regulatory remit of the Central Bank, but there is no reason debt collectors cannot be regulated in the same way. The inclusion of the definition in this section will empower the Central Bank in that regard.

Amendment No. 70 deals with the fees charged by debt management agencies. Section 62 of the Bill gives the Central Bank the power to impose on a person who is authorised to carry out the work of a debt management firm "such conditions or requirements or both as the Bank considers appropriate relating to the proper and orderly regulation and supervision of debt management firms". That is very much welcome. Also welcome is the provision that the Central Bank may direct that person "not to carry on the business of a debt management firm for such period (not exceeding 3 months) as is specified in the direction". My amendment seeks, in addition, to empower the Central Bank to direct a direct management agency to publish the fees and charges it proposes to apply to its customers.

I referred to moneylenders in the context of an earlier amendment. The Central Bank requires all moneylenders to publish their fees and charges, which are made available on the bank's website. The intent of this amendment is to empower consumers by ensuring they have as much information as possible. It does not seek to create any obligation, rather it simply provides another way in which the Central Bank may choose to direct a debt management agency. I have dealt with cases in which people have moved from tracker to variable-rate mortgages, for instance, because they did not read the documentation they were given or did not understand the conditions set out therein. This is about empowering consumers by requiring debt management agencies to publish their fees and charges in a transparent way.

I do not propose to accept amendments Nos. 43 and 57 as proposed by Deputy Doherty. The Minister for Finance has pointed out that he has no responsibility for the regulation of debt collectors and debt collecting firms. Debt collection services apply across a significantly broader range of activities than simply the recovery of moneys for financial products. They also apply in the case of utilities, rents and other consumer debts, as well as debts between businesses. The Minister for Justice and Equality is responsible for legislation in this area. The Non-Fatal Offences Against the Person Act 1997 applies to all debt collectors operating across all sectors of the economy, including private individuals and debt collecting firms. Under section 11 of that Act, it is an offence to demand payment of a debt in a way designed to cause harm, distress or humiliation. A person found guilty of offences under the Act is subject to large fines and up to 14 years' imprisonment. In the case of financial institutions that use debt collecting firms, the Central Bank has imposed requirements that offer protection to consumers under its revised consumer protection code. The code obliges the covered regulated entities to ensure that any outsourced activity such as debt collection complies with the requirement of the code.

In fairness to Deputy Doherty, he has been consistent on this issue in recent years. I understand he introduced a Private Members' Bill in this regard and also raised it during other Private Members' debates. We have had two initiatives in this specific area, as I discovered in the course of my preparations for this debate. There is no doubt that this is an area that requires closer regulation. However, as the Minister for Finance, Deputy Michael Noonan, pointed out on Committee Stage, it is under the auspices of the Minister for Justice and Equality. The latter has indicated a willingness to examine the issue in a constructive way and to work with colleagues across the House to establish an improved regulatory and statutory framework for this area. I very much hope that whatever comes out of that initiative or series of initiatives will address the issues Deputy Doherty has identified.

Amendments Nos. 44 and 58 deal with an issue in respect of the definition of "excepted person" which was raised on Committee Stage, namely, that the Money Advice and Budgeting Service was not included in the list of exempted categories. That organisation is a charity, does not charge for services and receives Government funding. Meeting any one of these three criteria would provide an exemption under the legislation. In the interests of certainty and greater clarity, however, it is considered appropriate to name MABS specifically as being exempt from the definition of a debt management service and to provide that organisation with an exemption from the requirements provided for in respect of a money transmission service.

Amendments Nos. 45 to 56, inclusive, and 59 to 69, inclusive, are technical amendments.

I do not propose to accept Deputy Doherty's amendment No. 70. The provision that was agreed in this regard on Committee Stage is broad enough to cover the requirement. In addition, the Central Bank's revised consumer protection code will require the publishing of fees and services by the entities covered by the provisions in this Bill. Section 62 provides that the bank may impose on a debt management agency "such conditions or requirements or both as the Bank considers appropriate relating to the proper and orderly regulation and supervision of debt management firms". I very much take on board what Deputy Doherty is seeking to do in terms of ensuring fees are transparent, but it is our view that the existing broad definition as set out under section 62 allows that to happen in circumstances in which the Cental Bank deems it necessary. Therefore, I do not accept the necessity of including the provision in amendment No. 70.

Amendment No. 71 is a technical amendment.

I take the Minister of State's point in regard to my amendment No. 70 that the reference in section 62 to "such conditions or requirements or both as the Bank considers appropriate" would seem to allow the Central Bank to require these entities to publish their fees and charges. If he can tell me that this will actually happen, that is fair enough and there is no need to press the amendment. In other words, if it is the intention of Government that the fees and charges of debt management agencies will be published in the same way that moneylenders' fees and charges are published, then there is no need for this additional transparency provision. My concern, however, is that this potentially will not happen even though, as the Minister of State outlined, the scope for it to happen is contained within the existing provision.

That is why I wanted to specify it in the Bill as a subsection. If the Minister of State can confirm to me that it is intended that the fees and charges of debt management agencies will be published in the manner I have suggested, that would be welcome.

In respect of amendment No. 43 concerning the regulation of debt collectors, I agree with the Minister of State up to a point. There is no doubt that the Minister for Justice and Equality and the Department of Justice and Equality have a role to play in regulating debt collectors. The problem is that this has fallen between two stools, between the Departments of Finance and Justice and Equality because of the different types of debt collector involved, while the Minister of State has mentioned different types of product and service and so on. It is welcome that the Minister for Finance has indicated that the Minister for Justice and Equality is willing to consider this and work with others. There is no doubt that my party and I will work closely with the Minister if he is bringing forward this legislation.

I want, however, to discuss the core of this amendment. The amendment does not deal with debt collectors across the board, although the Minister of State spoke about business debts and so on. It does not attempt to regulate debt collectors in that fashion; it defines a debt collector as "a person who for remuneration collects or seeks to collect consumer credit debt" and, therefore, applies to consumer credit debt only. The Central Bank should regulate any agency that collects consumer credit debt. This involves accepting that there is a role for the Department of Justice and Equality in dealing with debt collectors, but the amendment attempts to include consumer credit debt within the terms of a financial service provider in order that a portion of it can be regulated by the Central Bank. That is one of the major core problems and the reason we have not so far moved to regulate debt collectors because some of their work falls within the brief of the Minister for Finance and some within the brief of the Minister for Justice and Equality because of the different types of service and product involved. This is simply about consumer credit debt and it would be very hard to say the Central Bank should not regulate consumer credit debt and its collection. I appreciate the fact that the Minister of State has decided not to accept the amendment, but I have spoken on it again because I passionately believe we need to regulate for it. This is one of the few areas left unregulated and we must move quickly towards regulating it. While the Minister for Justice and Equality is committed to dealing with something in the future, we could in this Bill which could pass into law within a few days regulate consumer credit debt. We could deal with it in a wider way when the Minister for Justice and Equality introduces his Bill.

On the latter issue raised by the Deputy, consumer credit debt has a very broad definition. Wearing my other hat, I saw information on debts outstanding to the State, which are somewhere in the region of €400 million, in the non-collection of debts, overpayments of social welfare and a whole range of other things. One could ask whether that should be part of it. In any aspect of codifying the law it is better to take a more streamlined approach rather than doing it piecemeal. We know from our discussions on the Finance Acts that there is an argument for codifying the law, consolidating it and making clear what it means. Were we to accept the amendment, the approach would be piecemeal, albeit - I accept the Deputy's point - specific to one area.

I mean it sincerely that the Minister for Justice and Equality is examining this issue closely and has indicated that he would like to move in this area. The Department of Finance and the Minister for Finance will work closely with him, but he is the lead Minister in this area and has shown a very strong zeal for introducing legislation and reform that he believes is necessary. There is no doubt that the public and private sectors argue for the need to codify the law in this area. The question is whether we do it in a piecemeal or a consolidated way. It is the considered view of the Government that a consolidated approach through the Department of Justice and Equality is the way to go. That does not take from the fact that the Department of Finance which obviously has a huge interest in this area because of the points the Deputy has made will look very closely at and work with him on this matter. I assure the Deputy that that will happen.

On the Deputy's other amendment concerning the fees charged, to be as blunt as possible, I cannot see any reason the fees charged would not be published. That is why that is provided for, as I said, in section 62. Irrespective of that section, there is also within the consumer protection code a requirement for the publication of fees. The Central Bank is not an agency of the State, but it is an autonomous organisation, as set out in statute over many years, and its remit is slightly different. I cannot see a circumstance in which the fees charged would not be published; it is in the interests of consumers, financial companies and those dealing with this area that they would be published. We believe that what the Deputy is attempting, rightly in the context of his amendment, is provided for and we do not see a difficulty in ensuring the fees charged are published in the manner set out in the consumer protection code.

In respect of amendment No. 70, based on what the Minister of State has said, I am aware that when an agency or the courts interpret legislation or the law, they will also consider the intention-----

They will also look at the debate.

Therefore, the Minister of State's statement is very welcome. On that basis, I will not press amendment No. 70.

I welcome the commitment of the Minister for Justice and Equality to deal with this issue. What is absent is a timeframe and movement on this issue, although there have been efforts for quite a while to have the area regulated. On that basis, I will press the amendment concerning the regulation of the collectors of consumer credit debt. I hope we can identify a timeframe to deal with that issue because while it is something that would not fall within my brief as finance spokesperson, I have a keen interest in it and would like to work on it with the Ministers for Finance and Justice and Equality.

Amendment put and declared lost.

I move amendment No. 44:

In page 48, between lines 38 and 39, to insert the following:

"(b) the Money Advice and Budgeting Service,".

Amendment agreed to.

I move amendment No. 45:

In page 48, line 39, to delete "(b) any licensed" and substitute "(c) any licensed".

Amendment agreed to.

I move amendment No. 46:

In page 48, line 41, to delete "(c) a barrister" and substitute "(d) a barrister".

Amendment agreed to.

I move amendment No. 47:

In page 49, line 3, to delete "(d) a person" and substitute "(e) a person".

Amendment agreed to.

I move amendment No. 48:

In page 49, line 9, to delete "(e) the Insolvency" and substitute "(f) the Insolvency”.

Amendment agreed to.

I move amendment No. 49:

In page 49, line 15, to delete "(f) personal representatives" and substitute "(g) personal representatives".

Amendment agreed to.

I move amendment No. 50:

In page 49, line 17, to delete "(g) trustees of" and substitute "(h) trustees of".

Amendment agreed to.

I move amendment No. 51:

In page 49, line 20, to delete "(h) the Bank," and substitute "(i) the Bank,".

Amendment agreed to.

I move amendment No. 52:

In page 49, line 21, to delete "(i) An Post," and substitute "(j) An Post,".

Amendment agreed to.

I move amendment No. 53:

In page 49, line 22, to delete "(j) the National" and substitute "(k) the National".

Amendment agreed to.

I move amendment No. 54:

In page 49, line 23, to delete "(k) the National" and substitute "(l) the National".

Amendment agreed to.

I move amendment No. 55:

In page 49, line 24, to delete “(l) the National” and substitute “(m) the National”.

Amendment agreed to.

I move amendment No. 56:

In page 49, line 25, to delete “(m) any other” and substitute “(n) any other”.

Amendment agreed to.
Amendment No. 57 not moved.

I move amendment No. 58:

In page 50, between lines 13 and 14, to insert the following:

“(ii) the Money Advice and Budgeting Service,”.

Amendment agreed to.

I move amendment No. 59:

In page 50, line 14, to delete “(ii) any licensed” and substitute “(iii) any licensed”.

Amendment agreed to.

I move amendment No. 60:

In page 50, line 16, to delete “(iii) a barrister” and substitute “(iv) a barrister”.

Amendment agreed to.

I move amendment No. 61:

In page 50, line 20, to delete “(iv) the Insolvency” and substitute “(v) the Insolvency”.

Amendment agreed to.

I move amendment No. 62:

In page 50, line 27, to delete “(v) personal representatives” and substitute “(vi) personal representatives”.

Amendment agreed to.

I move amendment No. 63:

In page 50, line 30, to delete “(vi) trustees of” and substitute “(vii) trustees of”.

Amendment agreed to.

I move amendment No. 64:

In page 50, line 33, to delete “(vii) the Bank,” and substitute “(viii) the Bank,”.

Amendment agreed to.

I move amendment No. 65:

In page 50, line 34, to delete “(viii) An Post,” and substitute “(ix) An Post,”.

Amendment agreed to.

I move amendment No. 66:

In page 50, line 35, to delete “(ix) the National” and substitute “(x) the National”.

Amendment agreed to.

I move amendment No. 67:

In page 50, line 36, to delete “(x) the National” and substitute “(xi) the National”.

Amendment agreed to.

I move amendment No. 68:

In page 50, line 38, to delete “(xi) the National” and substitute “(xii) the National”.

Amendment agreed to.

I move amendment No. 69:

In page 50, line 39, to delete “(xii) any other” and substitute “(xiii) any other”.

Amendment agreed to.
Amendment No. 70 not moved.

I move amendment No. 71:

In page 53, lines 19 and 20, to delete “Central Bank Act 1942” and substitute “Act of 1942”.

Amendment agreed to.

I move amendment No. 72:

In page 57, to delete lines 22 to 27 and substitute the following:

“(5) A regulated financial service provider falls within this subsection if, in the preceding financial year, a complaint relating to the regulated financial service provider which has been made to the Financial Services Ombudsman has been found by that Ombudsman to be substantiated or partly substantiated.”.

Amendment No. 72 deals with the three-complaints rule. The legislation proposes that if the Financial Services Ombudsman thinks that it would be in the public interest to do so, a report may be made if a regulated financial service provider has, in the preceding financial year, at least three complaints made against it to the Financial Services Ombudsman which have been found to be substantiated or partly substantiated. There will be varying complaints from how people have been treated by a financial service provider to more serious cases of bad practice. The problem is that the financial ombudsman will be constrained from making a report unless a minimum of three complaints has been made in the preceding 12 months. Amendment No. 72 removes this three-complaint clause and, instead, provides that the ombudsman can issue a report if it is in the public interest and one complaint has been made. This will provide flexibility. I accept there may not necessarily be a need for a report on every complaint made. However, the legislation insists it must be in the public interest for a report to be issued. This amendment allows for the financial ombudsman to issue a report in the public interest even if only one or two complaints have been made in the preceding 12 months. It is a minor amendment but leaves power with the ombudsman.

The legislation also proposes a report from the financial ombudsman will contain the name of the regulated financial service provider, including any trading name, the identity of any group of which the regulated financial service provider is a member and the number of complaints found to be substantiated, or partly substantiated, in respect of the regulated financial service provider in the preceding financial year. For example, if complaints were made against a subsidiary of AIB - I am not making any accusations against any institution - that it was trying to move customers off tracker to variable rate mortgages in an underhand way, the financial ombudsman could issue a report on the company and state that AIB is the parent group. Amendment No. 73 proposes to ensure such a report would give a brief summary of the nature and content of each complaint found to be substantiated, or partly substantiated, in respect of the regulated financial service provider in the preceding financial year. This could cover interest rates, overcharging and switching mortgages. We know the majority of complaints being currently substantiated by the financial ombudsman concern those taken off tracker mortgages to variable rate ones. The ombudsman does not have the power to name the institutions involved. My concern is that the ombudsman could have a file with up to 100 complaints about an institution but can only name the institution and the number of complaints without explaining the nature of the complaints.

On amendments Nos. 72 to 77, on Committee Stage we discussed the de minimis rule in regard to the naming of providers who had substantiated or partly substantiated complaints against them. The legislation provides for the naming of providers where there are in excess of three complaints against them. This provision is adequate. The argument made, to which the Minister responded, was on the proportionality question, namely, that in order for a systemic problem to emerge which requires further investigation, it is not unreasonable to say three or more complaints would have to be made to highlight the problem. If three or more complaints were made on a specific issue related to a specific product or behaviour, one would think there was a systemic problem. The argument the Minister made on Committee Stage was related to the sense of smell about a matter, namely, that if there was a bad smell about one provider in a small town, it could have a hugely detrimental effect on the totality of the business. That is why the three complaints rule has been included in the section to make it proportionate to the scale of the problem that may emerge because if there is a problem in one area, there will be a problem in another in terms of the individual, the business or the product sold. The three complaints rule is an important proportionate response to a problem that may come to the attention of the Ombudsman from time to time. Therefore, we are not proposing to take on board amendment No. 72 as it would disproportionately and negatively deal with financial services providers.

I will also not be taking on board amendment No. 73 as I have proposed a similar amendment in this regard. There was a discussion during the debate on Committee Stage about whether the category and description of a substantiated or partly substantiated complaint against a financial services provider should be published. In response we agreed to examine these points before Report Stage. Following consultation with the Office of the Attorney General, I can confirm that under section 70, section 57BF(2)(ca)(i) of the principal Act already deals with the issue of category. That is the clear view of the Attorney General. The point the Deputy is raising in terms of the description and categories involved has been dealt with as they are set out under section 70 in terms of identification in the report and the different classes involved. I draw the Deputy's attention to section 70, paragraphs (i) and (ii) of section 57BF(2)(ca) of the principal Act.

Paragraph (i) states: "the form and manner in which the information specified in the report is given, including provision for the categorisation of the different classes of regulated financial service providers identified in the report and the different classes of financial services to which the complaints by reason of which they are so identified relate ...". It is our view that the point the Deputy is making is dealt with and there is provision for this in section 70 which deals with the ombudsman's report to include information on complaints. That is an open and shut case.

With regard to the description of substantiated or partly substantiated complaints referred to by Deputies Michael McGrath and Pearse Doherty, we have brought forward amendment No. 77 to summarise the different types of complaint, as well as the different products to which they relate. Amendments Nos. 74 to 76, inclusive, are technical amendments.

I am aware of paragraphs (i) and (ii) to which the Minister of State referred. However, they do not state clearly that there will be identification of the nature of the complaint. They deal with the sub-categorisation of the regulated financial service provider. To obtain clarity, I will give an example. If a financial institution had a dozen claims made against it that were substantiated by the ombudsman and, say, the claims were that it wrongly moved its customers from tracker mortgages to variable rate mortgages, using the powers of the Central Bank, the powers provided under this legislation or existing powers, would the report include not only the name of the institution, the parent company and the number of claims made but inform other consumers of the nature of the complaints made, that the ombudsman had upheld 12 complaints made against the institution that it was wrongly moving tracker mortgage consumers to variable rate mortgages?

If that is clear, there is no issue in that respect.

I have another point on the other amendment. As I will probably not get in to speak on it again, I will make that point now. It relates to the three complaints rule. I agree with the Minister's position in terms of proportionality and point that if there is a bad smell about something in an area, one would not want to alarm everybody in the village. All of this is left in the trust of the Financial Regulator. Sometimes there may be a bad smell about something in a village that the rest of those living in the village should not be informed about it, but sometimes the smell is very damaging to the individual because on examining its nature the individual realises that the problem could be systemic. Even though the individual might have identified only one matter that had a bad smell about it, the ombudsman would have to intervene, investigate the matter and examine how it had happened and if in his or her view it was a matter about which the rest of the village should be alerted. That is the whole point of this. Under this section, the ombudsman is being curtailed in identifying a major issue because two blocks are being put in his or her way. The first block is that three complaints of the same nature must be made and the second is that they must be made within a 12 month calendar period.

There are potential circumstances - I hope they will never arise - where the identification and upholding of a complaint, or two, by the ombudsman are of a nature and size to cause significant alarm and the ombudsman will have to judge whether it is in the public interest that the matter be brought to the attention of the wider public. In this respect, I again cite the example of tracker and variable rate mortgages. I cited a case to the Minister for Finance on Committee Stage of talking to a person late at night about their difficulty in holding on to the family home where the bank had issued a letter demanding that they surrender it. I looked at the documentation and told the person that they were supposed to have a tracker mortgage, but they were on a variable rate mortgage. If people knew that was happening in that institution, which I will not name, they would take their documents out of the drawer and examine the paperwork. If the subject of the complaint is of a scale that the financial services ombudsman believes it is in the public interest to bring it to the attention of the wider public, I genuinely believe we should not curtail his or her view that it is in the public interest, otherwise it is wrong. If a complaint has been upheld after the ombudsman has examined it and if the view has been formed in his or her office that it is in the public interest to inform other consumers about the complaint - this issue is about the protection of consumers at the end of the day - why put two blocks in the way of the ombudsman? In terms of the amendment, I intend to remove one of these blocks, the three complaints rule. In effect, it means that if a complaint is made to the ombudsman and that there was only one complaint about one institution in the previous financial year, the ombudsman probably will not issue a report because he or she has to make a judgment that it is in the public interest.

Amendment No. 77 provides for the insertion of the words "and the different descriptions of those complaints" in section 70. To take the tracker mortgage example and the dubious activities of a bank or a collection of banks that might attempt to move people from a tracker mortgage, there is nothing in any shape or form which does not allow a full description of those complaints.

It is our considered view that there has been a response to Committee Stage proceedings and the need to free up the opportunity of the Financial Services Ombudsman to describe such complaints in his report, and there is no difficulty around that. I believe Deputy Doherty's concern, which is genuine, is being met by our amendment No. 77. It is perfectly straightforward.

Deputy Doherty referred to the different description of those complaints in the subsequent amendment. Ipso facto there could be a thousand and one different descriptions but the amendment deals with a literal description of a complaint, whether relating to a tracker mortgage or anything else, and I believe that deals with the issue.

There is consensus on the issue of the de minimis rule. The point has been made about tracker mortgages and although it is an issue for banks it is not necessarily an issue for the small trader in a small town. In any course of events, more than three complaints could be made against a bank where this particular activity is attempted by it. The key issue is to be proportionate. The Minister for Finance had a good discussion with colleagues on this issue on Committee Stage. It is important to be proportionate and small brokers, who must deal with all the issues that come with the territory, are not the same as large plcs or banks. With the de minimis rule we are trying to introduce some proportionality in the scale of complaints that are made. A defined architecture is being put in place as a result of this Bill and there have been other changes on the regulatory side in recent years. If difficulties emerge they will come to public attention via the Financial Services Ombudsman and the Central Bank. There is no attempt in this legislation to in any way delimit or reduce the opportunity for a full investigation or a full public airing of these issues. For these reasons I do not propose to accept Deputy Doherty's amendment. However, in respect of the other point about the importance of describing these complaints in a manner that is clear and transparent, I assure Deputy Doherty that amendment No. 77 deals with the issue. There should be no doubt about that.

Amendment No. 77 is one I had overlooked. It is clear from what the Minister of State has said that the arguments put forward on Committee Stage were heard, and that amendment deals with the issue, albeit in a different section. That is to be welcomed and it means the amendment I tabled in that area is not required. I warmly welcome the fact that the specific information will now be provided as a result of the amendment introduced by the Minister of State on Report Stage.

I completely and utterly disagree on the de minimis rule. Either we trust the Financial Services Ombudsman or we do not. We trust the Financial Services Ombudsman to make a judgment on the public interest. This does not require him to publish a report. We all know that a report can be as short as two lines; it could simply detail the institution, the number of complaints and the types of complaint. It can be very short and it need not be onerous in respect of the bank or the Financial Services Ombudsman, but it would only be in cases where it is in the public interest. I trust the Financial Services Ombudsman and, therefore, I will be pressing the amendment.

Question put: "That the words proposed to be deleted stand."
The Dáil divided: Tá, 74; Níl, 47.

  • Bannon, James.
  • Barry, Tom.
  • Burton, Joan.
  • Byrne, Catherine.
  • Byrne, Eric.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Coffey, Paudie.
  • Conaghan, Michael.
  • Conlan, Seán.
  • Connaughton, Paul J.
  • Conway, Ciara.
  • Coonan, Noel.
  • Corcoran Kennedy, Marcella.
  • Deasy, John.
  • Doherty, Regina.
  • Donohoe, Paschal.
  • Dowds, Robert.
  • Doyle, Andrew.
  • Durkan, Bernard J.
  • English, Damien.
  • Feighan, Frank.
  • Ferris, Anne.
  • Fitzpatrick, Peter.
  • Flanagan, Charles.
  • Flanagan, Terence.
  • Griffin, Brendan.
  • Hannigan, Dominic.
  • Harrington, Noel.
  • Harris, Simon.
  • Hayes, Brian.
  • Hogan, Phil.
  • Howlin, Brendan.
  • Humphreys, Heather.
  • Humphreys, Kevin.
  • Keating, Derek.
  • Kehoe, Paul.
  • Kenny, Seán.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lyons, John.
  • McCarthy, Michael.
  • McGinley, Dinny.
  • McHugh, Joe.
  • McLoughlin, Tony.
  • McNamara, Michael.
  • Maloney, Eamonn.
  • Mathews, Peter.
  • Mitchell, Olivia.
  • Mitchell O'Connor, Mary.
  • Mulherin, Michelle.
  • Nash, Gerald.
  • Neville, Dan.
  • Nolan, Derek.
  • Ó Ríordáin, Aodhán.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Mahony, John.
  • O'Sullivan, Jan.
  • Penrose, Willie.
  • Phelan, Ann.
  • Phelan, John Paul.
  • Quinn, Ruairí.
  • Rabbitte, Pat.
  • Reilly, James.
  • Ring, Michael.
  • Ryan, Brendan.
  • Shatter, Alan.
  • Spring, Arthur.
  • Stagg, Emmet.
  • Stanton, David.
  • Tuffy, Joanna.
  • Twomey, Liam.
  • Walsh, Brian.

Níl

  • Adams, Gerry.
  • Boyd Barrett, Richard.
  • Broughan, Thomas P.
  • Browne, John.
  • Calleary, Dara.
  • Collins, Joan.
  • Collins, Niall.
  • Colreavy, Michael.
  • Crowe, Seán.
  • Daly, Clare.
  • Doherty, Pearse.
  • Dooley, Timmy.
  • Ellis, Dessie.
  • Ferris, Martin.
  • Flanagan, Luke 'Ming'.
  • Fleming, Sean.
  • Halligan, John.
  • Healy-Rae, Michael.
  • Higgins, Joe.
  • Keaveney, Colm.
  • Kelleher, Billy.
  • Kirk, Seamus.
  • Mac Lochlainn, Pádraig.
  • McConalogue, Charlie.
  • McDonald, Mary Lou.
  • McGrath, Finian.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McLellan, Sandra.
  • Martin, Micheál.
  • Moynihan, Michael.
  • Murphy, Catherine.
  • Naughten, Denis.
  • Ó Caoláin, Caoimhghín.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • O'Sullivan, Maureen.
  • Pringle, Thomas.
  • Ross, Shane.
  • Shortall, Róisín.
  • Smith, Brendan.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Troy, Robert.
  • Wallace, Mick.
Tellers: Tá, Deputies Emmet Stagg and Joe Carey; Níl, Deputies Aengus Ó Snodaigh and Seán Ó Fearghaíl.
Question declared carried.
Amendment declared lost.
Amendment No. 73 not moved.

I move amendment No. 74:

In page 57, line 46, to delete “the Ombudsman’s finding” and substitute “the Financial Services Ombudsman’s finding”.

Amendment agreed to.

I move amendment No. 75:

In page 58, line 8, to delete “this”.

Amendment agreed to.

I move amendment No. 76:

In page 58, line 20, to delete “report and” and substitute “report,”.

Amendment agreed to.

I move amendment No. 77:

In page 58, line 22, after “relate” to insert the following:

“and the different descriptions of those complaints”.

Amendment agreed to.

Amendments Nos. 78 to 81, inclusive, are related and may be discussed together.

I move amendment No. 78:

In page 59, line 23, to delete “paper”.

Amendments Nos. 78 and 79 provide that an agreement does not only have to be in paper format but may also be in electronic format and be e-mailed to the consumer. Amendments Nos. 80 and 81 are simply technical amendments.

Amendment agreed to.

I move amendment No. 79:

In page 59, line 27, to delete “paper”.

Amendment agreed to.

I move amendment No. 80:

In page 60, lines 2 and 3, to delete all words from and including “immediately” in line 2 down to and including “section” in line 3 and substitute the following:

“immediately before the coming into operation of section 75(d) of the Central Bank (Supervision and Enforcement) Act 2013”.

Amendment agreed to.

I move amendment No. 81:

In page 60, line 24, to delete “section 76” and substitute “section 75(d)”.

Amendment agreed to.

Amendments Nos. 82 and 83 are related and may be discussed together.

I move amendment No. 82:

In page 63, line 37, to delete “under 8C” and substitute “under section 8C”.

Amendments Nos. 82 and 83 are drafting amendments to section 78 of the Bill in regard to the Financial Services (Deposit Guarantee Scheme) Act 2009.

Amendment agreed to.

I move amendment No. 83:

In page 63, line 51, to delete “section 8(2)” and substitute “section 8C(2)”.

Amendment agreed to.

I move amendment No. 84:

In page 64, between lines 16 and 17, to insert the following:

“Amendment of Central Bank & Credit Institutions (Resolution) Act 2011.

79.—(1) In this section “Act of 2011” means the Central Bank and Credit Institutions (Resolution) Act 2011.

(2) Section 10 of the Act of 2011 is amended—

(a) in subsection (2)—

(i) by deleting paragraph (a), and

(ii) in paragraph (b) by inserting “46,” after “42(5),”,

and

(b) in subsection (4) by substituting “Subject to section 11(3), the Bank” for “The Bank”.

(3) Section 11 of the Act of 2011 is amended by inserting the following subsection after subsection (2):

“(3) Notwithstanding section 10(4), the Bank shall from time to time pay interest at the rate determined under subsection (2) on monies standing to the credit of the Fund.”.

(4) The Act of 2011 is amended by inserting the following section after section 11:

“Accounts and audit.

11A.—(1) The Bank shall cause—

(a) to be kept for the Fund, in such form as the Minister approves, all proper and usual accounts of income and expenditure, and

(b) the transmission of those accounts not later than 3 months following the end of the financial year to which they relate to the Comptroller and Auditor General for audit.

(2) The Comptroller and Auditor General shall audit the accounts of the Fund transmitted to him or her under subsection (1) and shall prepare a written report in relation to those accounts.

(3) Within one month of the completion of the audit referred to in subsection (2), the Bank shall present a copy of the accounts and the report of the Comptroller and Auditor General on the accounts to the Minister who shall, as soon as may be, cause copies thereof to be laid before each House of the Oireachtas.”.

(5) The Act of 2011 is amended by substituting the following for section 12:

“12.—(1) The Minister, following consultation with the Bank, may contribute to the Fund such sums as the Minister considers appropriate, from the Central Fund or the growing produce of the Central Fund.

(2) The Minister is entitled to be reimbursed from the Fund for all contributions under subsection (1) together with any interest, at the rate determined under section 11(2), that may have accrued on those contributions at the rate determined.

(3) All sums paid out of the Fund in repayment of a contribution under subsection (2) shall be paid into the Central Fund.”.

(6) The Act of 2011 is amended by substituting the following for section 46:

“46.—(1) The Minister may, at the request of the Bank, agree to the provision, directly or indirectly, of a financial incentive, on terms and conditions that the Minister considers appropriate, to a person to become a transferee under—

(a) a transfer order, or

(b) where a transfer order has been varied under section 33, the transfer order as so varied.

(2) For the purposes of subsection (1)(a), the person to which the financial incentive is given may be a bridge-bank.

(3) A financial incentive may take the form of a payment, a loan, a guarantee, an exchange of assets or any other kind of financial accommodation or assistance, and may be or may include financial support within the meaning of the Act of 2008.

(4) Where the Minister agrees to the provision of a financial incentive under this Act and it is in the form of a payment or gives rise to a payment, the payment shall be made by the Bank from the Fund to such person as the Minister may direct.

(5) Where the Minister agrees to the provision of a financial incentive under this Act, a term of its provision may be in respect of the repayment in case of setting-aside of the transfer order, whether or not there is re-transfer of any assets or liabilities to the transferor.

(6) The amount of any financial incentive provided under this Act is a debt due and owing to the Bank for the account of the Fund by the transferor and may be recovered by the Bank for the account of the Fund as a simple contract debt in any court of competent jurisdiction.

(7) Any sum recovered by the Bank under subsection (6) shall be paid into the Fund.”.

(7) Section 47 of the Act of 2011 is amended in subsection (1) by deleting “or the Minister”.

(8) Subsections (1), (2)(b) and (3) shall be deemed to have come into operation on the coming into operation of the Act of 2011.”.

This amendment involves amendments to sections 10, 11, 11A, which is a new subsection, 12, 46 and 48 of the Central Bank and Credit Institutions (Resolution) Act 2011, more commonly known as the resolution Act. These amendments are designed to clarify and streamline the operation of the resolution Act. The resolution Act provides the permanent resolution regime in this State that allows the Central Bank to deal in an effective manner with credit institutions that are failing or are likely to fail into the future. It also provides that this will be done in a way that provides maximum protection for the Exchequer and provides confidence in the financial system as a whole.

The tools provided in the resolution Act to achieve these objectives are as follows: bridge banks; the ability to transfer assets and liabilities from failing banks; special management orders; modified liquidation processes specific to credit institutions; the formulation of recovery and resolution plans; and the establishment of the credit institutions resolution fund. The amendments to the resolution Act would provide that in the context of a transfer of the assets and liabilities of a credit institution in resolution, where the Minister has indicated his consent to a financial incentive that is in the form of a payment, the payment will be made on his direction by the Central Bank from the resolution fund established under the Act, rather than the Minister making a payment from the Central Fund, as currently envisaged in section 46 of the Act, which is subsequently recouped from the resolution fund. This will provide a more straightforward and streamlined procedure.

The amendments will also provide more comprehensively in regard to the payment of interest on moneys in the resolution fund and in regard to the preparation and audit by the Comptroller and Auditor General of the resolution fund's accounts.

Amendment agreed to.

Amendments Nos. 85 to 89, inclusive, are related and may be discussed together.

I move amendment No. 85:

In page 64, line 24, to delete “1973” and substitute “19731”.

1OJ No. L228, 16.8.1973, p.3

Amendments Nos. 85 to 88, inclusive, are all drafting amendments to Part 13 of the Bill. Amendment No. 89 relates to the Credit Institutions (Stabilisation) Act 2010. That Act provides broad powers to the Minister for Finance to act on financial stability grounds to effect swift restructuring actions and recapitalisation measures as envisaged under the programme agreed with the external authorities.

The purpose of the restructuring measures is to ensure the banking sector is proportionate to the size and needs of the economy. Under the Credit Institutions (Stabilisation) Act 2010, the Minister may, having consulted the Governor of the Central Bank and formed certain opinions, make four types of order addressed in relevant institutions - first, a direction order; second, a special management order; third, a subordinated liabilities order; and fourth, a transfer order - after which the Minister then applies to the High Court for an order in those terms.

The proposed amendment to section 38 of this Act is designed to make clear that where, in the context of a transfer of assets and liabilities of a credit institution, the Minister provides a financial incentive in accordance with section 38(1) of the Act and the financial incentive involved is in the form of a payment, the payment will be made from the Central Fund or the growing produce thereof. That is the intention of the section as it stands. The amendment is simply to remove any doubt about that position.

Amendment agreed to.

I move amendment No. 86:

In page 64, line 29, to delete “class”.

Amendment agreed to.

I move amendment No. 87:

In page 65, lines 27 and 28, to delete “after the commencement of this Act” and substitute the following:

“after the coming into operation of section 82 of the Central Bank (Supervision and Enforcement) Act 2013”.

Amendment agreed to.

I move amendment No. 88:

In page 65, line 43, to delete “force” and substitute “operation”.

Amendment agreed to.

I move amendment No. 89:

In page 67, after line 32, to insert the following:

“Amendment of section 38 of Credit Institutions (Stabilisation) Act 2010.

89.—Section 38 of the Credit Institutions (Stabilisation) Act 2010 is amended by inserting the following subsection after subsection (3):

“(3A) Where the Minister provides a financial incentive under subsection (1) which is in the form of a payment or gives rise to a payment, the payment shall be made from the Central Fund or the growing produce thereof.”.”.

Amendment agreed to.

Amendments Nos. 90 to 92, inclusive, are related and may be discussed together.

I move amendment No. 90:

In page 70, line 25, to delete “or”.

Amendments Nos. 90 and 91 are drafting amendments to Schedule 2 of the Bill. Amendment No. 92 adds the four statutory instruments mentioned in the list of designated statutory instruments contained in Part 2 of the Second Schedule of the Central Bank Act 1942. This will ensure the Central Bank can appoint authorised officers to investigate suspected contraventions of those statutory instruments and apply the administrative sanctions procedures to any such contravention.

Amendment agreed to.

I move amendment No. 91:

In page 71, lines 35 and 36, to delete “section 87” and substitute “sections 79 to 83 and 85 to 88”.

Amendment agreed to.

I move amendment No. 92:

In page 71, between lines 37 and 38, to insert the following:

"

10

Schedule 2,

Part 2

(a) Substitute the following for item 36:"

36

S.I. No. 48 of 2011

European Communities (Reorganisation and Winding-up of Credit Institutions) Regulations 2011

The whole instrument

”.

(b) Insert the following:“

S.I. No. 799 of 2007

European Communities (Information on the payer accompanying transfers of funds) Regulations 2007

The whole instrument

S.I. No. 247 of 2010

European Communities (Credit Rating Agencies) Regulations 2010

The whole instrument

S.I. No. 352 of 2011

European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011

The whole instrument

S.I. No. 340 of 2012

European Union (Short Selling) Regulations 2012

The whole instrument

"

Amendment agreed to.

Amendments Nos. 93 to 101, inclusive, are related and may be discussed together.

I move amendment No. 93:

In page 74, between lines 45 and 46, to insert the following:

"

1

Section 14

Substitute the following for subsection (4):

“(4) Summary proceedings for an offence under this section may be brought and prosecuted by the Bank.”.

".

Amendment No. 93 is a drafting amendment. Section 13 of the Central Bank and Credit Institutions (Resolution) Act 2011 makes it an offence to carry on the business of a credit institution without contributing to the credit institutions resolution fund established under that Act.

Section 14 states that this offence is a hybrid offence that can be tried summarily or on indictment. Currently, subsection 4 of section 14 states that proceedings of a summary offence under this section may be brought and prosecuted by the bank. The intention was to allow the bank to prosecute summarily all offences committed under this section. However, the reference to proceedings for a summary offence is misleading as the offence concerned is not a summary offence but a hybrid offence that can be prosecuted either summarily or on indictment. This amendment, therefore, seeks simply to clarify that the bank may institute summary proceedings in respect of the offence in question.

Amendment No. 96 is a drafting amendment similar to amendment No. 93. Subsection 3 of section 9 of the Financial Services (Deposit Guarantee Scheme) Act 2009 states that proceedings for a summary offence under the Act may be brought and prosecuted by the bank. The intention was to allow the bank to prosecute summarily an offence committed under the Act. However, the reference to proceedings for a summary offence is misleading, as I said earlier, and might prevent the bank from instituting a prosecution in respect of a hybrid offence that can be tried either summarily or on indictment. This amendment, therefore, seeks to clarify that the bank may institute summary proceedings in respect of an offence under the Act.

Amendment No. 98 relates to the European Communities (Information on the Payer Accommodating Transfer of Funds) Regulations of 2007 which allow the Central Bank to appoint authorised officers endowed with various stated powers for the purpose of enforcing compliance with the provisions of these regulations. Amendment No. 98 amends the said regulations to replace the authorised officer powers contained therein with the authorised officer powers contained in Part 3 of the Bill. Amendments Nos. 94, 95, 97, 99, 100 and 101 are simply drafting amendments.

Amendment agreed to.

I move amendment No. 94:

In page 75, between lines 19 and 20, to insert the following: "

1

Section 90

In subsections (1) and (3) substitute “Part 3 of the Central Bank (Supervision and Enforcement) Bill 2013” for “Part 5 of the Central Bank Reform Act 2010”.

Amendment agreed to.

I move amendment No. 95:

In page 75, line 41, to delete "section 20" and substitute "section 21".

Amendment agreed to.

I move amendment No. 96:

In page 76, after line 28, to insert the following:

Section 5(2).

PART 4

Amendment of Financial Services (Deposit Guarantee Scheme) Act 2009

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Section 9

Substitute the following for subsection (3):

“(3) Summary proceedings for an offence under this Act may be brought and prosecuted by the Bank.”.

"

Amendment agreed to.

I move amendment No. 97:

In page 77, line 13, after "Bank" to insert "Reform".

Amendment agreed to.

I move amendment No. 98:

In page 77, after line 37, to insert the following:

Section 5(3).

PART 3

Amendments of European Communities (Information on the Payer Accompanying Transfers of Funds) Regulations 2007

Item

(1)

Provision affected

(2)

Amendment

(3)

1

Regulation 1

Insert the following definition:

“ ‘authorised officer’ means an authorised officer appointed under Part 3 of the Central Bank (Supervision and Enforcement) Act 2013;”.

2

Regulation 4

Substitute the following for Regulation 4:

“4. For the purpose of ensuring compliance with the Parliament and Council Regulation, an authorised officer may exercise any of the powers conferred on him or her under Part 3 of the Central Bank (Supervision and Enforcement) Act 2013.”.

"

Amendment agreed to.

I move amendment No. 99:

In page 79, line 30, to delete "paragraph (3)" and substitute "subparagraph (3)".

Amendment agreed to.

I move amendment No. 100:

In page 81, lines 3 and 4, to delete "foregoing matters" and substitute "matters referred to in clauses (a) to (e)".

Amendment agreed to.

I move amendment No. 101:

In page 82, line 3, to delete "clauses (a), (b), (c), (d), (e) and (f)" and substitute "clauses (a) to (f)".

Question proposed: "That the Bill do now pass."

Amendment agreed to.
Bill, as amended, received for final consideration.

I thank the Members opposite. It is fair to say that this Bill has been hanging around for quite some time and has been the subject of many Private Members' Bills. Two specific Bills emanating from Deputy Michael McGrath and many initiatives from Deputy Pearse Doherty have ultimately ended up in this legislation. It became a much larger Bill and, as a consequence, took far more time. I congratulate the Deputies opposite for sticking with this and helping the Minister ultimately produce a more thorough Bill as a result of the consultation and the amendments that were accepted. I also pay special tribute to officials in the Department of Finance who in the course of the past five years or so had to produce many pieces of legislation because of the financial crisis.

This legislation will radically change the way in which supervision and enforcement within the Central Bank are dealt with. The reason for our collapse was not just political. It was also a collapse of regulation, due diligence and confidence in the regulatory system. This legislation is a key component in modernising our law, giving the consumer the protection they need and giving financial institutions the clear instructions they also need in terms of a well-regulated financial services area in this country. I congratulate the Deputies opposite for their very constructive approach to this Bill and for their engagement with it.

I thank the Minister of State for his engagement here on Report Stage and the Minister for his engagement on Committee Stage. There is no doubt that the Minister listened to the concerns of the committee. This is probably the most engaging Bill we have seen where the views of the Opposition such as Deputy Michael McGrath's Private Members' Bills and all bar one of the amendments and suggestions I put forward have been incorporated into the Bill. Hopefully, it will make the legislation more thorough. While all legislation is kept under review, this Bill needs to be formally reviewed on an ongoing basis because we know these institutions try to move ahead of the regulatory process. I would encourage officials to have formal reviews. I am not sure of the timeframe. I commend the officials. I know it has taken a long time to get this passed but at least it will be passed and we will, hopefully, have better regulation as a result.

This is a critically important piece of legislation. I also thank the Minister of State, the Minister and the officials from the Department. In particular, I thank them for taking on board some of our suggestions concerning the regulation of debt management advisory firms and the Financial Services Ombudsman being given the power to publish some details of complaints concerning financial services providers. Both of those measures will greatly enhance the protections available to consumers and are a very significant step forward. I thank the Government for accepting the thrust of those proposals.

Question put and agreed to.