I move: "That the Bill be now read a Second Time."
The Department of Finance's retail banking review, published in November 2022, concluded that despite a decline in its usage, cash remains an important element of the payments system and the broader economy and that it is essential that cash remains readily available to customers through ATMs and other means across the country. The review recommended that the Department of Finance develop access-to-cash legislation with the initial objective of developing criteria to secure access to cash at about the levels of December 2022. The review also called on Department officials to require ATM operators and cash-in-transit, CIT, providers to be authorised and supervised by the Central Bank. The Finance (Provision of Access to Cash Infrastructure) Bill, published with Government approval on 31 July, addresses these recommendations. It will establish a framework to provide that any future evolution of the cash infrastructure will be managed in a fair, orderly, transparent and equitable manner and provide for the supervision of both ATM deployers and CIT providers.
Also arising from a separate recommendation in the retail banking review, the Bill will require the Central Bank to carry out and publish cost-benefit analyses of business standards it proposes to prescribe, as well as for regulations it proposes to make in relation to financial service providers. Any cost-benefit analysis carried out will have to consider the impact of any standards or regulations on consumers and their impact on fair competition.
Payments in Ireland and across the world are trending towards electronic options. In the years immediately prior to the pandemic, just under €20 billion was withdrawn annually from ATMs in the State. While this declined to €13.5 billion in 2022, cash is still important to our society and economy. It is important to consumers in all walks of life because it is a private, secure and instant form of payment. It is a budgeting tool for many people and allows individuals to maintain their financial independence. Cash is also important for the day-to-day revenue and expenses of many SMEs.
For many of us, making electronic payments by means of cards, phones and other novel devices may be the norm, but cash remains the preferred form of payment for many people. Recent research by the Financial Conduct Authority in the UK found that digital exclusion and income levels have the largest effect on how likely someone is to rely on cash, and a review by the Citizens Information Service this year found that many older people feel a push to online banking despite their preference for in-person services. This is why it is imperative to ensure that cash remains widely available and accessible. It will protect the economy when technology is not a viable option and ensure that those who rely on cash can continue to do so into the future. The Bill will support those who rely on cash and establish a framework to ensure that sufficient and effective access to cash is maintained into the future.
I will now set out the main provisions of the Bill. Sections 1 to 5, inclusive, give the Title to the Bill, set out when it will come into effect, define the terms used throughout, contain provisions in relation to expenses and include a standard section on ministerial regulations and orders.
Section 6 provides that the Minister for Finance shall prescribe the criteria for sufficient and effective access to cash. This will be achieved by prescribing the percentage of the population for each of the eight nomenclature of territorial units for statistics, NUTS, 3 regions in Ireland that must have access to an ATM and a cash service point within a specified distance of not less than 5 km and no more than 10 km. A cash service point is a location where cash can be deposited and withdrawn and where in-person assistance is available. Bank branches and post offices satisfy this definition. To ensure that there is sufficient ATM capacity, a minimum number of ATMs per 100,000 people will also be prescribed. The regions used will be the NUTS 3 regions relied on by the European statistical agency, Eurostat. In the first instance, the access-to-cash criteria will be based on December 2022 levels, taking account of the exits of KBC and Ulster Bank from the Irish retail banking market. Separately, this section also provides the Minister for Finance with the ability to prescribe a minimum number of ATMs per 100,000 people in each of the regions that are to be available outside of ATM operator hours, if required.
To ensure that access-to-cash infrastructure remains sufficient and effective in the future, when factors like the demand for cash and population change, this section also includes a provision for the review of the access-to-cash criteria under different conditions. Reviews must be completed within nine months of publication of final census data on population if cash demand decreases by more than 15% in one calendar year compared to the preceding calendar year, or at the request of the Minister for Finance. The Central Bank may also undertake a review on its own initiative. Having assessed such a review, the Minister for Finance may amend the criteria for some or all of the NUTS 3 regions.
Section 7 provides the Minister for Finance with the ability to request the collection and publication of data in relation to cash infrastructure, such as the number and value of cash withdrawals by the Central Bank. This section also allows the Minister to specify the form and manner in which this information shall be published and whether publication will be on a once-off basis or at repeated intervals.
Section 8 defines and sets out the process for identifying local deficiencies. These could occur where, even if the regional access-to-cash criteria in section 6 are being met, localised difficulties with access-to-cash infrastructure arise. A person can notify the Central Bank of a potential local deficiency and it may then assess the notification. Where the Central Bank determines that there is a local deficiency, the Central Bank shall notify the designated entities, a term I will explain shortly.
Section 9 provides for the preparation and publication of guidelines on local deficiencies to assist with that process. The Central Bank is required to publish the guidelines within 12 months of enactment of the Bill. In preparing these guidelines, the Central Bank shall consult with a number of stakeholders, including the Minister for Finance, designated entities and representatives of consumers, persons with disabilities, elderly persons, SMEs and others as it considers appropriate.
Section 10 provides for the monitoring and enforcement of compliance with the access-to-cash criteria in section 6 and the addressing of local deficiencies defined in section 8. The Central Bank will monitor and publish information in relation to cash infrastructure, that is, the ATMs and cash service points. Where this reveals a breach of the access-to-cash criteria or if the Central Bank has determined under section 8 that there is a local deficiency that warrants a remedy, the Central Bank will notify the designated entities, which will have an opportunity to propose how to address the issue. Where no proposals are made or if the plans proposed by designated entities are not considered sufficient, the Central Bank may then issue a draft direction to one or more of the entities.
Section 11 deals with the designated entities that I have mentioned. The section provides that credit institutions that exceed percentage shares of current accounts and household deposits prescribed by the Minister for two consecutive quarters shall be designated entities. These thresholds may be set between 5% and 15%. The Minister may, following consultation with the Central Bank and other specified stakeholders, amend these thresholds, where appropriate.
Section 12 deals with access fees, which are fees charged by an ATM operator for the use of a specific ATM and they are not normal bank fees or charges related to someone’s account. The section provides that the Minister for Finance may make regulations that prohibit or cap the charging of fees for cash withdrawals from ATMs where the ATM operator is not the provider of the account from which the withdrawal is being made. Such regulations may only be made subsequent to consultation with the Central Bank and where the Minister is satisfied that financial inclusion is being impaired due to the imposition of access fees. While access fees are not charged in Ireland for domestic withdrawals at present, this section has been included in case they are subsequently introduced.
Section 13 provides a legislative basis for the Central Bank to collect information in relation to cash infrastructure from designated entities, ATM operators, CIT providers and any other entity that operates a cash service point on behalf of a designated entity.
Sections 14 to 16, inclusive, define specific terms used in this part of the Bill, such as “application” and “registration”, provide for registers of ATM deployers and CIT providers, and require ATM deployers and CIT providers to register with the Central Bank.
Sections 17 to 19, inclusive, provide for transitional arrangements to allow existing ATM deployers and CIT providers to continue to operate while in the process of registering with the Central Bank; outline the registration process and the reasons for refusing an application for registration; and the processes for appealing a refusal.
Sections 20 to 22, inclusive, provide that the Central Bank can impose conditions on CIT providers when granting an application for registration, make failing to comply with the conditions of registration an offence and set out the terms of registration.
Sections 23 and 24 provide for amendments to the conditions of registration; the steps the Central Bank must take when doing so; and require any organisation registered with the Central Bank to include a regulatory disclosure statement in all advertisements.
Sections 25 and 26 set out the conditions under which the holder of a registration can apply to the Central Bank for a revocation of its registration, the conditions under which the Central Bank can revoke a registration and the associated procedures.
Sections 27 to 29, inclusive, require the Central Bank to publish a notice of revocation in Iris Oifigiúil, allow the Central Bank to give a direction prohibiting the holder of a registration from continuing to operate and allow the Central Bank and the Private Security Authority to enter into an agreement that facilitates data sharing between the two bodies in order to ensure the functioning of this legislation.
Sections 30 and 31 define key terms applicable to Part, including “prescribed requirement” and “relevant records”.
Section 32 provides that the Central Bank, following consultation with the Minister, shall make regulations that apply to ATM operators only. These regulations will be in relation to: notification to the Central Bank, by ATM operators, of proposed changes to its business that will materially alter the scope of service provision; immediate notification of the Central Bank by ATM operators of closures of an ATM in circumstances beyond its control; and requirements for ATM operators to ensure appropriate service standards. These service standards will include hours of availability, maximum withdrawal limits, the stocking of ATMs with different denominations, maximum periods of unavailability, signage requirements, information to be communicated by ATM operators to users and information to be published by ATM operators, including planned changes to services.
Sections 33 to 36, inclusive, provide that any ATM operator that fails to comply with any prescribed requirement commits an offence; require ATM deployers and CIT providers to retain records specified by the Central Bank and to notify it of any change of address; allow the Central Bank to issue a written direction to an ATM deployer or CIT provider that has failed to comply with this legislation; and allow the Central Bank to apply to the High Court for an order to enforce any directions it has issued.
Sections 37 and 38 allow the Central Bank to appoint a person to act as an authorised officer for the purposes of monitoring compliance with Parts 3 and 4 by ATM operators and CIT providers; describe the powers of an authorised officer; and provide that a person that impedes or obstructs an authorised officer in the exercise of their duties is guilty of an offence.
Sections 39 and 40 provide for the Central Bank to bring summary proceedings for offences committed under the Bill, list the associated fines and proceedings and hold that where an offence has been committed by a body corporate, a director, manager, secretary, or other officer of the body corporate, that person, as well as the body corporate, shall be guilty of an offence.
Sections 41 to 43, inclusive, allow the Central Bank to make regulations prescribing levies and fees to be paid by ATM deployers and CIT providers. They also provide that where the total amount of fees and levies is greater than the Central Bank’s expenditure on its functions under this Bill, the Central Bank shall reduce the fees and levies accordingly in the following year. Conversely, should the reverse occur, the fees and levies shall be increased.
Sections 44 to 48, inclusive, provide for consequential amendments to the Central Bank Act 1942 that are necessary for the proper functioning of the Bill. These are: amending section 32C(b) of the Act, to allow for the inclusion of the costs of regulation of the access to cash sector in the Central Bank’s levy calculations; amending section 32(1), to allow for the inclusion of the Central Bank’s performance of its functions under this legislation in the Central Bank’s annual performance statement; amending section 33AK, required to facilitate information-sharing between the Central Bank and the Private Security Authority under section 29 of this Bill; amending section 57A(1), allowing decisions under this legislation to be treated as appealable decisions for the purposes of the application to these decisions of the provisions relating to appeals to the Irish Financial Services Appeals Tribunal; an insertion into Part I, Schedule 2 of the Act to make this Bill a designated enactment, allowing for the application of the Central Bank’s sanction powers in relation to Parts 1 and 2 of the Bill.
Section 49 provides for an amendment to Schedule 5 of the Companies Act 2014 to include CIT providers and allow for an examinership process if appropriate.
Sections 50 and 51 require the Central Bank to carry out a cost-benefit analysis of the business standards it proposes to prescribe in relation to financial service providers and to carry out a cost-benefit analysis of regulations it proposes to make in relation to these providers. The issues to be considered in these assessments will include the potential impacts on consumers and fair competition.
The general scheme of the Bill was considered by the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. I am grateful to the committee for the time and effort put into the preparation of its report, which was supportive of the measures included in the Bill. The committee made a number of recommendations that were carefully considered during the drafting of the Bill. I will write to the committee in relation to how, in the context of the provisions in the Bill, we have responded to those recommendations. I look forward to further constructive engagement with its members and with other Members of the Houses as the passage of the Bill progresses.
This legislation comes at an inflection point in the use of cash and alternative payment options. It will put in place a framework which ensures that access to cash is sufficient and effective, while responding to evolving demand in the future. I commend the Bill to the House.