I thank the Cathaoirleach for allowing me to raise the charges announced recently by one bank. I would like to welcome the Minister of State to the House. I am glad she is taking action in relation to this question. The Minister of State is, I think, fully aware of the situation which has evolved in recent weeks. It represents a further chapter in the saga of the ordinary consumer being penalised. It is another penny-pinching and money-grabbing exercise by the banks. I ask the Minister of State, when she meets the banks or representatives of the Central Bank or both to impress on them that it is not on for them to bring in charges at will. She is aware that many charges brought in by the banks are often hidden charges. We must look in particular at the charges recently announced by Allied Irish Banks and the whole question of how the banks and building societies operate.
We have seen responses from other banks on how competition has worked and there is no doubt that the banking and financial world is going through a period of rapid change. In the past, people were met by their friendly bank manager and, with the exception of the parish priest, probably confided most in him. Unfortunately, times have changed. I am concerned that people are now not much more than a number to the bank. The banks do not want to see them. I understand the need to improve the system, particularly to ensure that people are paid by cheque so that there is less cash in circulation and not as great a need for security measures. However, people are increasingly being penalised if they want to use the old methods of withdrawing and lodging cash or pay for certain items by cheque. If people do not wish to use the latest plastic card in ATM machines which reduces their dealings with a bank, the banks either do not want to know them or penalise them in relation to the operation of their account.
The proposed changes, particularly in relation to Visa cards and cheque book accounts, will mean that people who cleared their account on time will have to pay an extra fee, an extra £15 charge on top of the Government charge of £10. It is up to the Minister of State, possibly in co-operation with her colleague the Minister for Finance, to insist on the Central Bank becoming more active and consumer oriented and not to accept these charges. I hope the Minister of State will make it clear that legislation will be introduced if the consumer is not protected. The Minister of State has contacted the Director of Consumer Affairs about the introduction of these charges. I have had complaints from constituents about banks sending them letters about them. The banks claim they are not making a profit if customers keep their accounts in credit. As a result they impose penalties or reduce the credit period. For those who go over the limit, and there are few of us who do not, the banks are introducing administration fees, referral fees and other charges.
The Central Bank has a role to play in this regard and I am pleased the Minister has taken the initiative and arranged to meet the banks, the Central Bank or both. I hope the Minister impresses on them the gravity of the situation and how consumers are affected. The ordinary person who has completed paper transactions through the years does not want to change to the "hole in the wall" system. People should be welcomed in the bank but they are complaining that the meter is running from the moment they speak to the bank manager about accommodation, mortgages or loans.
There must be competition in the banking sector. Some years ago one had to wait to get an application form for a mortgage from a building society. Now bank and building society managers are chasing customers in the same way as lawyers are accused of ambulance chasing. Borrowers must be made aware of the various hidden charges by some of the building societies or banks. I welcome the aggressive approach by some banks. Perhaps I am only getting half the story, but at least some banks are making an effort and putting the customer first. Interest should be paid on current accounts which are in credit.
I am glad the Minister of State has taken steps to deal with this. However, she and the Minister for Finance must act if there is no response. The Central Bank must be more than an observer at the proceedings. The banks believe they can introduce any charges they like and hidden costs. The consumer must be protected, particularly in regard to overcharging. I compliment the Minister of State on taking action and I hope she will take steps to deal with this if there is not a satisfactory response.