Are we taking amendments Nos. 1 and 2 together?
Central Bank (Individual Accountability Framework) Bill 2022: From the Seanad
The Dáil went into Committee to consider amendments from the Seanad.
Seanad amendment No. 1:
Section 94: In page 74, to delete lines 20 to 23 and substitute the following:
“(3) In relation to an inquiry, notice of which was given by the Bank before the commencement of section 53, the Act of 1942, as amended by sections 53 and 55 and Chapter 3 of Part 4, applies in relation to the following:
(a) an inquiry decision made before the commencement of section 53 if the decision has not, before that commencement, been notified by the Bank to the regulated financial service provider or person concerned;(b) an inquiry decision made after the commencement of section 53.”.
No, we will take them separately.
Previously, section 94(3) only catered for decisions made before the commencement of section 23. These amendments are necessary in order to ensure that decisions made after the commencement of section 53 will also be subject to the new Zalewski provisions in section 33AW, as intended. Amendment No. 1 is necessary to ensure that the section operates as intended and the new provisions apply to an inquiry decision that has not been notified to the inquiry subject, regardless of whether the decision is made before or after the commencement of section 53.
The two amendments are related. We are only discussing amendment No. 1.
There is flexibility to debate both if you want to.
I will only make one contribution because the amendments stem from the same issue, namely the Supreme Court decision in the Zalewski case. The drafting of the Bill was undertaken to incorporate a more fair and transparent procedure following the decision of the Supreme Court. The Bill makes changes to the administrative sanction procedure to ensure it conforms.
Changes made to incorporate these standards in light of the decision in that case involve the separation of functions during a Central Bank inquiry so that a person who makes a decision to hold an inquiry shall not be involved in making submissions, in leading evidence or in examining a witness on behalf of the Central Bank. Regarding a fitness and probity investigation already begun under existing legislation, the Bill now clarifies that investigations already begun are not affected by the commencement of the new requirements that provide for the separation of functions following the Zalewski case.
These amendments are welcome. They will ensure that ongoing investigations can continue and decisions made by the persons concerned prior to the commencement of the new legislation will stand. My understanding is that there was a gap in the provisions concerning investigations that had begun in cases where the Central Bank had not issued a notice of inquiry. If these amendments were not made today, cases of this sort would not have incorporated the provisions of the decision of the Supreme Court in this case. These amendments ensure the provisions will kick in as soon as practicable. Therefore, we in Sinn Féin will support the amendments.
I welcome the passage of the Bill, as I have done before. We are now at the final stage. It has been a long time coming - far too long, in my view. Every customer has a right to be treated fairly and to be protected from gross misconduct, unethical behaviour and gross mismanagement, including corporate mismanagement. They should have an assurance that when misconduct occurs, those responsible will be held to account because we know that has not been the case in this State for far too long.
The status quo has been a regime where firms are investigated and fined at a corporate level, but individual accountability is non-existent. We are now well over a decade since the financial crash, a decade during which we saw scandal after scandal, the most significant of which was probably the tracker mortgage scandal which caused so much harm. It is telling that we are only now dealing with the final stages of this legislation. As I have said, public trust in banking can only be restored when the culture at the heart of our banks changes. That can happen by holding individuals to account.
We know we are well behind the eight ball in regard to this. Britain introduced an accountability regime in 2016 and Australia did so in 2017. In January 2017, over six years ago, my party brought forward a motion in the Dáil calling for legislation that would ensure individuals and financial institutions could be held to account. The following year, the Central Bank published its report on the behaviour and culture in Irish retail banks on foot of the tracker mortgage scandal.
As part of that report, it recommended legislation introducing a new individual accountability framework, including new conduct standards, a senior accountability regime and enhancements to the fitness and probity regime and the enforcement process. We are only considering this legislation and dealing with the end stages of it now. This is six years since my motion and five years on since the Central Bank report. It shows a lack of priority on behalf of the Government.
However, we are finally at the end stages of this. As I said, the legislation is long overdue. The public has waited for it for far too long. We need to keep it under continuous review to make sure it meets its objectives and the hope and ambition the House has for it. Obviously, we hope that it will not have to be used and that we do not see scandals we have seen in the past. However, if has to be used, hopefully it will be able to be used as part of our toolbox to make sure individuals are held to account where gross misconduct is happening within financial institutions.
I confirm the second amendment to section 94 is a consequential amendment to delete subsection (5). The effect of the deleted subsection is achieved in subsection (2) in conjunction with the new subsection (3) in amendment No. 1. Both amendments were agreed by the Seanad and I am happy to commend them to the House.
I will take the opportunity to thank Deputy Doherty in particular for his input and his work on this Bill and this issue more broadly over a long period of time. On my behalf and that of my predecessor as well, I acknowledge the enormous amount of work that all the officials have put in over a period of time to make sure this Bill was brought to fruition. It is important to acknowledge the need for this Bill to be robust and to be able to withstand legal challenge. It has taken longer than anyone would have liked, but we are now at this point. It involved lengthy engagement with the Office of the Attorney General and the Central Bank to ensure the legislation was effective and constitutionally robust. Of course, during the drafting of the Bill, substantial changes were needed to take account of the Supreme Court Zalewski decision, which has been referred to. It is a large and complex Bill, but this is a milestone day. It is a very significant day, given the passage of the Bill.
In terms of commencement, I inform the House that all sections of the Bill will be commenced as soon as possible following enactment, with the exception of sections 3 to 6, inclusive, and section 10 that deal with the senior executive accountability regime, conducts standards and certification, respectively. These sections will be commenced following the completion of the Central Bank's public consultation that I urge all interested parties to engage with to inform the regulations and guidance that will underpin the provisions of the Bill. It is expected that the Bill, as enacted, will be fully implemented in the current year.
Seanad amendment agreed to.
Seanad amendment No 2:
Section 94: In page 74, to delete lines 29 to 32.
Seanad amendment agreed to.
Seanad amendments reported.
A message will be sent to Seanad Éireann acquainting it that Dáil Éireann has agreed to amendments Nos. 1 and 2 made by Seanad Éireann to the Central Bank (Individual Accountability Framework) Bill 2022.