Credit Card Charges: Motion.

I move:

That Seanad Éireann notes the public concern at the high level of interest charged on credit cards; notes the difficulties this poses for the public in general and for young people in particular and calls on the Minister for Enterprise, Trade and Employment to investigate the matter.

I would like to draw attention to a number of different facts about how credit cards are used, the high rates of interest charged on them and to draw some conclusions and make some additional recommendations to the Minister of State, Deputy Jacob, whom I welcome to the House.

A recent MRBI/Irish Times survey brought a number of important points to our attention. According to the poll, three-quarters of Irish people clear their entire credit card bill every month but 10 per cent of those do not know how much they owe. Just 1 per cent of those with cards admitted that they did not meet their last minimum payment.

The survey also shows that just over one-fifth of Irish adults have credit cards compared to the US where 80 per cent of adults have at least one card and many have several. This information points to a significant opportunity for European and US banks wishing to expand. Consumers can anticipate a period of intense competition as these companies try to attract new customers. That will be good for the consumer.

Credit cards obtained in the Republic carry high interest charges ranging from 18 per cent to 24 per cent. The introduction of competition to this market could significantly reduce those rates. I will make a few points later on how much we can expect that figure to decrease taking US figures into account.

The results of that survey put our discussion in context. Twenty-one per cent of adults – and equal number of men and women – have credit cards. Of these, 74 per cent cleared their balance in full the last time they received a bill; 16 per cent paid somewhere between the balance and the minimum payment and 6 per cent paid the minimum. Men and women take different approaches when paying their credit card accounts – 80 per cent of men cleared their bills and 12 per cent paid more than the minimum payment, compared to 69 per cent of women clearing their bill and 21 per cent clearing somewhere between the balance and the minimum payment. The majority of Irish adults keep their credit card bills low: two-thirds spend less than £250 per month with just 8 per cent spending between £501 and £1,000 and 2 per cent – most of whom are Dublin based – charging up more than £1,000 per month.

The amendment to the motion calls on the responsible Minister "to take immediate steps to reduce the indefensible interest rates being charged by the banks on these instruments". It is important that we keep this debate in context and do not pander to media reports by demanding an immediate change in interest rate charges. The matter needs to be investigated and interest rates must be reduced but the route we are taking this evening is the proper way to go.

There are a number of other interesting facts which may help to put our debate in context. One-fifth of Irish people have credit cards; two-thirds of the country's professional white-collar workers and large farmers do not. Of those people who have credit cards, 70 per cent pay off the entire balance at the end of each month; 10 per cent have no idea of their balance and Dublin people are more likely to have a credit card than those outside the capital and are more likely to spend more.

Women use their credit cards to buy clothes and shoes while men prefer to charge their petrol and travel bills. I wonder if we can learn something from that. Class differences also emerge from the survey with ABC1F1 categories, professional white-collar workers and larger farmers, generally using their credit cards more than those in the C2DEF2 categories comprising skilled and unskilled manual workers, the unemployed and small farmers.

That information gives us an idea of the type of people who use credit cards and how they use them. It is very easy for us to complain about the banks charging too much interest on credit cards but it is fair to say that the way in which they charge their interest and the level of interest charged is too high. We should focus our attention on the way interest is charged. Interest rates are too high, at 18 per cent to 24 per cent per month, and not transparent enough. A survey on the Internet this afternoon showed that the United States had the lowest interest rate at 7.75 per cent variable interest with 20 days free credit. The highest rate was 13.75 per cent with 25 days free credit.

Interest is not charged on credit card bills if the full amount outstanding is paid at the end of each month. Interest is only charged when the balance goes forward to the next month. The two main issues are the amount of interest attracted and the way it is calculated. While I knew it would be difficult to establish the way interest is charged, one of the disturbing things I discovered from speaking to an official in the Bank of Ireland this afternoon was that if a person has a balance of £1,000 outstanding at the end of a month and he or she pays either the minimum payment or almost all the money outstanding, for instance £990, there will be a balance outstanding on the account before the due date of £10. Interest is charged on all purchases made and is paid on £1,000 from the date of purchase. In fairness to the credit card company, interest is only charged to the day of the transaction on the account.

The banks will claim that people are informed of this when they sign up to a credit card deal but I suggest that the fine print could be bigger. People could be given specific examples of interest charges. When I spoke to an official this afternoon in the Bank of Ireland, the lady took me through the calculations and gave me honest answers but I had to make a telephone call and did so for a specific reason. I cannot comment on the policy of AIB, NIB or other financial institutions.

It appears from the survey to which I referred that people who use credit cards are reasonably well educated and have a good standard of living. The onus is on the consumer to become aware of the conditions of their contracts. While I addressed the issue that the conditions should be in bigger print there is an onus on consumers to understand what they are buying into. If we go down the route of bashing the banks the issue will not be addressed.

Although credit cards are used as a way of providing short-term finance there are better ways of getting a loan. Credit unions and banks provide low interest loans. It is important that consumers consider their needs and put together something which will best serve them instead of using the credit card system as a way of providing short-term finance.

When the Minister is considering the area of credit cards, perhaps he would investigate the issue of surcharges. It has become the norm that when people buy concert tickets and pay for them over the telephone, not only do they have to pay a booking fee, but also a credit card charge per ticket. If a person buys five tickets at £50 per ticket there will be a credit card charge on each ticket. That is unfair and should be examined.

Will the Minister examine the issue of credit card payments on the Internet? What security features should be put in place and what warnings should be given? It is vitally important for people who use the Internet to make purchases, and with the development of e-commerce, there is a secure manner in which they can pay for goods. If people use their credit card number on the Internet they should not be defrauded out of money.

There is enormous public concern at the high level of interest rates and the manner in which they are charged, which is not clear, but to suggest that we should call on the Minister to take immediate steps to reduce the indefensible interest rates is going over the top. The Minister was asked to investigate this matter and I am sure he will come back to us on it. Some of our concerns are in the area of transparency and, if a code of practice can be voluntarily implemented by the banks, this issue could be addressed in a proper manner.

I am more than impressed with the extensive and comprehensive trawl through the Internet, the banks and so on. I feel a little like the emperor without clothes.

Credit cards are an excellent idea for those who can afford them. I agree with the sentiments of Senator Cox that it would be easy to bash the banks as they are the legitimate targets in many areas, not least on the question of high interest charges. In the context of the Celtic tiger everybody is not availing of credit cards. The statistics to which Senator Cox referred are an indication of that. There are many people for whom a credit card is like winning the lotto. They could not even comprehend it. Those who hold credit cards and are among the percentage who do not settle their bills within the specified period deserve everything they get in one respect, but questions must be asked about the APR of 23 per cent plus in the current low interest rate regime. I do not think anyone in this House would justify the continuing high level of interest rates charged by the banks for those who incur the penalty. On the plus side, there is approximately 25 days interest free credit.

I am concerned about cash transactions made abroad which, I understand, are charged immediately. There is no advantage in that. It is based on the currency exchange rate on the day. This is not a problem within the euro zone but there could be an impact for people travelling to America where the dollar/euro rate is changing on a daily basis if they are making substantial purchases. I agree with Senator Cox that every other area of society has introduced the buzz words of the 1990s – accountability and transparency – but that does not exist within the banks. They give the impression that people are shown the charges on their monthly bills. However, one would need a magnifying glass to go through them and a lawyer to interpret them. All of us have had the experience of querying bank statements and discovering that the banks have found another new way of getting money. The greatest scandal of all is the maintenance of a charge for currency exchange, which I have no doubt will be referred to by Senator Ross, who has trumpeted this issue with regularity in his column in theSunday Independent, for which I applaud him.

It is outrageous and unacceptable that for the months leading up to the introduction of the euro the banks led us to believe there would not be high currency exchange rates and that we would get what we paid for. There must be someone working in the banking sector who worked in Merrion Street in 1993 when we all thought we would get cheaper cars as a result of the abolition of the then iniquitous vehicle import tax. If there is a God in Heaven, I hope the individual who introduced vehicle registration tax will be brought to account for it.

He was a Minister from the Senator's party.

It is totally indefensible. I would not support a Fianna Fáil Minister or any Minister who introduced VRT, which is outrageous. Someone in the banking sector took that idea and used it on exchange rates so that we are paying the same amount of money. I say this in the context of exchange rates and credit cards.

Senator Cox has covered this issue comprehensively. She has made the points which are important to stimulate debate in this area and to keep it on the agenda. Banks need to be more transparent in how they decide on these charges. People should not be surprised every time they query a bill to discover that yet another layer of charges has been introduced or they are paying money they did not know they would be paying. That point, if nothing else, should be the cornerstone of this debate.

Current deposit rates are less than 1 per cent, while loan rates are approximately 8 or 9 per cent. Banks buy money at 3 per cent, yet people pay up to 24 per cent for debts incurred on credit cards. That is a scandal.

I asked for this debate some weeks ago and I thank the Leader of the House for allowing time for it this evening.

Credit cards are useful because they allow people to travel across boundaries and to pay large sums without having to carry cash. Credit cards are good if they are used properly. That is not difficult for those of us able to manage our affairs, as is the case for the vast majority of credit card users. People can use them without incurring penal interest rates.

I have no sympathy for banks. If a person buys a product from someone, they are charged on their credit card but the person who supplies the service is also charged by the credit card company which, thus, makes money on the double, so to speak. As far as I know, it charges approximately 10 or 12 per cent, although I am sure Senator Ross will clarify that when he speaks. The interest rate is not just penal, but disgraceful and unacceptable.

Some years agoSeven Days carried out an inquiry into the affairs of moneylenders in the State. The penal interest rates on credit cards should be equivalent to what moneylenders charge people. The current rate is unacceptable, indefensible and unnecessary, particularly when the banks make vast profits.

Credit card users who get into debt should be entitled to Government intervention. Credit card statements should show the cumulative interest paid over the past 12 months so that a credit card user knows that not only are they paying £15 or £28 interest this month, but that they paid £300 or £400 interest in the past year. If that requires legislation, then it should be done. That would make the process more transparent and help to highlight people's debts for them. It could also be used as a strong argument for reducing interest rates. People sometimes say that although they spent £500 on their credit card at Christmas they are only paying £10 or £15 next month, yet they are paying a lot more.

It is a nightmare for people who get into debt with their credit cards. People who are lucky enough to have a reasonable income and who can manage their affairs properly are not slaves to their credit cards. However, many people are not in that position. People who are slaves to their credit cards just roll over their interest and reduce their balance by £20, £30 or £40, while their debts get worse every month. They do not realise that bank loans are cheaper. If they went to the bank they would get a lower rate of interest, but they do not do so. That is why 16 per cent of credit card holders still have outstanding balances.

We need to examine the operations of banks and credit card companies. If someone who lives outside Dublin wants to book tickets for a concert there, they must pay more than the cost of the tickets through credit card charges. This is a rip-off. I hope the Minister outlines what he will do about this. The Government should insist that these charges are abolished because it constitutes profiteering. If a person wants to go to a concert in Dublin they must pay extra charges and that is unfair and unnecessary. It is time the Government stood up to these companies. I hope this debate makes an impact.

We know from experience that people get into debt so we must help them to get out of it. People who get into debt with their credit cards are often told by their credit card company that their limit of £1,000 has been increased to £2,000. The amount is rolled over and added up automatically. People who cannot manage their affairs properly often find themselves in greater debt because the credit card company extended their limit without asking them. They do not mind not being asked because they need the money and this draws them into a web. It is time for the Government to deal with this problem efficiently and effectively. Members on all sides of the House support this debate. It is welcome and important and we want action on the matter. I agree with Senator Cox on the issue of extra charges and booking fees etc. The credit card companies should be made to display the interest rates charged last year.

I am pleased to have the opportunity to respond to this Private Members' motion on an issue which reaches into the lives of virtually every one of us.

On a point of order, is the Minister's script being circulated?

We will get it in instalments.

When extra copies of the script arrive they will be circulated.

Concern about the interest rates charged by financial institutions has not been confined to credit card rates. For example, the level of mortgage interest rates has been questioned recently. Given the extensive use of credit in modern life, interest rate levels can have a significant impact on our standard of living.

I am concerned at allegations that rates of interest for credit cards have not been reduced to reflect recent reductions in base rates. Assumptions that the interest rate market is functioning competitively must come under scrutiny in such circumstances. Is there a lack of competition in the market or is it possible that competition laws are being breached?

It seems that retail lending rates of interest for credit cards, mortgages and other non-mortgage lending in Ireland, are high relative to other countries. There is no evident reason for this and consumers are entitled to an explanation.

In so far as the APR for credit cards is concerned, the range was from 18 per cent to 22.6 per cent at the end of March. While this range offers the consumer some limited possibility of shopping around, the range is fairly narrow and even the lower end of the range seems excessive relative to base rates which stand at 2.5 per cent. The scope for consumer choice would be narrower were it not for some new arrivals to the market in the past year, which is to be welcomed, and which have had an influence in a slight reduction in rates.

By way of comparison, the APRs charged by UK credit card companies are in the main lower than rates charged here – as low as 15 per cent while their current base rate at 5.25 per cent is higher than that applying here. There is, therefore, a smaller gap on the margin.

In the US credit card borrowing is cheaper with introductory APRs of circa 5 per cent. Credit cards are used there in the same way as overdrafts are used here. US companies operating in the UK offer introductory rates of about 7 per cent. This seems to reflect a broader pattern regarding interest rates charged here. For example mortgage rates here appear to be among the most expensive in the EU. Furthermore, while many institutions offer mortgages in Ireland there is a closeness or approximation of rates which seems odd.

In defence of their credit card rates, the credit card companies may argue they are providing a different type of finance and that many of their customers settle their accounts during the interest free period. However, this does not explain why their rates are so high in relative terms, both to the rates charged in other countries and relative to base rates here.

Neither the Minister for Enterprise, Trade and Employment nor the Director of Consumer Affairs has any function in relation to interest rates. Under the terms of the Consumer Credit Act, 1995, the director's approval is required to the introduction of new bank charges and increases in existing charges. However, the definition of bank charge specifically excludes interest rates. If it were considered desirable to introduce some form of statutory control over retail interest rates, I would regard this as a matter for the Minister for Finance given that Minister's responsibility for the financial services sector generally. I understand the ongoing approach taken by the Department of Finance in regard to retail interest rates is to allow such rates to be determined by the market. Retail interest rates are the responsibility of the financial institutions in the context of market conditions – the market, therefore, is meant to decide.

The interest of the Minister for Enterprise, Trade and Employment in this matter arises from her responsibilities for consumer protection and competition. On the consumer side, the emphasis in recent times has been on helping consumers to make informed choices, to enable them to make the best use of the choices which the market provides for them. An example is to be found in the requirement to show the APR attaching to credit. The Director of Consumer Affairs has been discussing a code of transparency with the banks – the discussions are virtually completed and she is anxious to finalise them. I commend this work and I strongly urge the banks to co-operate fully with the early adoption and publication of this code. Given the scandals which have come to light in the banking sector during the past year or so, the onus is on the banks to take all possible measures to restore public confidence in the banking system.

Consumers also have responsibility in relation to their use of credit cards. They should be aware of the many financial products available to suit differing needs. Credit cards are not an appropriate product for consumers who require long-term credit. I urge consumers to act sensibly in their use of credit cards. Inappropriate use of such cards not only creates problems for consumers but generates excessive profits for the credit card companies at the expense of consumers. Consumers should take care to inform themselves of the conditions attaching to the use of particular credit cards, for example, the length of the period of grace before interest begins to be charged, the details of penalties for late payment and so on.

This is not to say that responsibility for the proper use of cards falls solely on consumers. There is a strong case for arguing that the financial institutions should be more active in monitoring the use of credit cards and where customers tend to use their cards for medium-term to long-term finance they should be made aware of more affordable financial products such as term loans.

Measures are in place and further measures are being developed to provide appropriate protection for consumers in this area, primarily by ensuring transparency in their transactions with financial institutions. This strategy and the Department of Finance approach of letting the market determine retail interest rates, assumes that, and can only be effective if, healthy competition operates in this market.

I cannot over-emphasise the importance of competition in the economy generally. It is a major determinant in consumer welfare and in providing an engine for growth. Availability of goods or services at the lowest possible prices are for the benefit of the economy. Anti-competitive behaviour would amount to national treason in economic terms and we would view very seriously anti-competitive behaviour in any area of the economy.

With increasing competition in our inter national markets we need to be continually seek ways to have an edge with our competing products. Outmoded practices and anti-competitive regimes which adversely affect consumers cannot be tolerated. We are an island nation with an open economy where an effective competition policy is vital. We have the legal and institutional framework in place to ensure a vigorous and active approach to identifying and eliminating anti-competitive practices.

A new era of competition law was ushered in with the passage of the Competition Act, 1991, which sets the basic rules governing competition. This regime was strengthened significantly by the passage of the Competition (Amendment) Act, 1996. This Act not only sets out criminal offences and penalties for breaches of the rules of competition, it offers protection to parties aggrieved in consequence of anti-competitive activity.

The Competition Act, 1991, prohibits, by analogy with Articles 85 and 86 of the Treaty of Rome, anti-competitive practices and the abuse of a dominant position. It applies to undertakings, an undertaking being defined as an individual, a body corporate or an unincorporated body or persons engaged for gain in the production, supply or distribution of goods or the provision of a service.

Section 4 of the Competition Act, 1991, prohibits and makes void all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in the State or any part of the State.

Section 5 prohibits any abuse of a dominant position while section 6 provides that any person aggrieved in consequence of anti-competitive activity has a right of action in the courts for relief by way of injunction or declaration and damages, including exemplary damages.

The Competition (Amendment) Act, 1996, reflecting the concern to have a proactive competition law, provides for both civil and criminal proceedings and penalties for breaches of the rules of competition as set out in the 1991 Act. The penalties for conviction on indictment can run to £3 million or 10 per cent of turnover, whichever is the greater, plus a two year term of imprisonment where individuals are involved. The Act provides that individuals proved to be directors, managers or other similar officers proceeded against are presumed to have authorised wrongdoing until they can prove the contrary.

In addition, the 1996 Act provides for public enforcement of the rules of competition. A Director of Competition Enforcement has been appointed to the Competition Authority in order to give effect to the public enforcement provisions. The director has the power to investigate complaints and to act on his own initiative. Any complaints about anti-competitive behaviour should be made to the Director of Competition Enforcement at the Competition Authority. Needless to say, legal action is not possible without evidence of anti-competitive behaviour.

Our competition law exists because competition is an important pillar or building block in economic and industrial policy. With the operation of effective competition, resources are allocated efficiently, innovation and enterprise prosper, consumer welfare is safeguarded and employment is generated. Competition policy, therefore, has a vital role to play in helping increase the competitive strengths of the economy, improving welfare and sustaining employment. When the dynamics of market forces are unhindered, citizens and the economy as a whole benefit.

Anti-competitive practices cost an economy dearly. Any such losses to our economy are totally unacceptable. The economy has improved greatly in recent times due to hard work and effort on the part of all our people. By working to eliminate anti-competitive practices we can add substantially to growth. The promotion of vigorous competition is, therefore, vital for our future and it must apply in all sectors of the economy.

It is particularly important that it is fostered in those sectors which have a tradition of collusion or gentlemen's agreements in the way that they manage their businesses. Competition has undoubtedly increased in the financial services sector in recent years and this is to be welcomed. However, it may be that vestiges of old practices still linger and that the situation concerning credit card interest rates reflects this. I urge anyone who has any evidence of anti-competitive practices in the financial services sector to report the matter to the Competition Authority. It has made it clear that it would respond vigorously to any such reports and it is clearly in the interests of consumers and the economy that it should be in a position to do so.

I hope the credit card institutions are taking note of the concern expressed in this House and elsewhere. I intend to bring the concerns expressed here to the attention of the Minister for Finance, the Central Bank and the Director of Consumer Affairs. I will also discuss with the Tánaiste the options open to the Competition Authority under the competition laws to address the question of interest rate differentials which on the face of it seem inexplicable. The Competition Authority might, for example, undertake an investigation or a study of the method of competition affecting the determination of such interest rates. I thank the Senators who put down the motion for raising this interesting and important topic. I assure them that the Government shares their concerns.

I move amendment No. 1:

To delete all words after "Employment" and substitute the following:

"to take immediate steps to reduce the indefensible interest rates being charged by the banks on these instruments".

I am glad to move the amendment because, in line with the original motion, the Minister of State's reply is mealy mouthed and particularly unhelpful. It promises no action. The Minister of State used words such as "concern" and said he will discuss the matter with the Tánaiste. He said he would convey our concerns and that he is equally concerned about what is happening. The Minister of State promised to do nothing. From his reply it appears that the abuses being perpetrated by the banks will continue with the acquiescence of the Government.

The motion was tabled in a modest way to register the concerns of certain Members of the House about the malpractices of the banks at present. However, the modesty of the intention is not matched by the promises of action. The Minister of State effectively said he agrees that what is happening is wrong, but he will not do anything about it. He will not do anything because there is no political will in the Fianna Fáil Party to take on these monstrous institutions which have for so long bullied small savers and borrowers. The Minister of State's reply is extremely disappointing and I do not understand it.

It is fine for the Minister of State to say that we should allow the market decide. I apologise to no one for my respect for the market and my belief that the market economy is probably the best option. However, this does not mean that it should be allowed to run riot and rampant over smaller people who cannot protect themselves. The Minister of State insulted consumers when he urged them to read the small print. It is probably their fault that the banks are coming down heavily on them. However, everybody knows that the fundamental problem with the banks and customers is that there is an unequal relationship between them. The banks are bullies who exploit this unequal relationship and it is disingenuous to say that if one had read the small print, one would know something was wrong. Nobody reads the small print and to expect individuals to read it ignores the reality that people do not and will not read it.

Banks are bullies. That is how they make their money. They exploit people because they know they do not read the small print. They know that people will borrow money at irresponsible levels and not think about how they will pay it back. They should not be allowed to do this. Why did the Minister of State not say that the market should be allowed to decide but as the shareholder in the ACC and the ICC, the Government will stop them doing it because it has control over them? The Minister of State did not say that. There is alaissez faire attitude on the part of the shareholder who preaches morality elsewhere but will not control its own banks and ensure they behave in a moral fashion because the market must decide. The market cannot be allowed to be immoral. It must push the economy as far as it can and make it prosper. However, it cannot allow these monstrous institutions to behave as they do.

I see a whitewash of the banks. I see the dangers of the massive political lobbying which has gone on in the House on behalf of the banks since the disgrace they made of themselves over the DIRT issue last year. It is having an effect and I have noticed that Government statements about the banks since then are in tone with the Minister of State's comments this evening. They are not determined. They express concern but promise nothing. My guess is that when the day of reckoning arrives on the great abuse of non-resident tax accounts, the banks will get away almost scot-free with a nominal gesture. They will be able to go about their normal business and exploit people again.

We should consider the reality of the credit card problem. The Minister of State was helpful in terms of certain information. It appears from his statement that the margins charged in Ireland are the largest in the world and he will do nothing about it. The Americans can have 5 per cent credit charges while in Ireland 21 or 22 per cent is charged and nothing is done about it. The market has not worked in this case. It is all very well to say competition will work; in this case it has not worked because there is a cartel. They all scratch each other's backs. They arrange the rates, stick to them and exploit the consumer. They are allowed to do it and that is the reason it happens.

The margins are so large it is worth reading some of them into the record. I rang Allied Irish Bank. I do not know whether it is the worst offender but it is a big offender in virtually everything else. I suspect it is the worst offender and it has lobbyists in this House so it does not get it in the neck from politicians the way it might do. I asked them the rate they charged visa card holders and they blandly replied 21 per cent and that it was normal. The rate is 21 per cent while inflation is 1.5 per cent. Then I asked them what happens if I am in credit. They replied that they give interest of 2.19 per cent to someone in credit. That is something most people do not know. That is 2.19 per cent compared to 21 per cent – brilliant. They think they are being generous. The margin is nearly 20 per cent. It is outrageous and scandalous and nobody knows. Nobody knows what they are paying.

Of course, they are exploiting vulnerable people who are consumed by the very greedy society in which we live. People want instant gratification, buy it and do not think of the interest rates.

Senator O'Dowd rightly pointed out a further profit which these institutions make. They are not only screwing the consumer for 21 per cent, they are screwing the merchant too. If one buys petrol from the proprietor of a petrol station, the consumer pays 21 per cent if he borrows for too long and the visa card company which is owned by the bank also charges the proprietor. The margins are in doubt. It is nearer 3 per cent than Senator O'Dowd's estimate. To be fair to them, he was probably estimating on the high side. However they are getting money from both sides. That is outrageous and should be stopped.

It is no good for the Minister to say there is nothing he can do about it. Of course he can, he can legislate for it. All he has to do is specify a limit. Free marketeers have no problem with that.

The date from which one pays interests if one goes over the time – which we all do – is not the date on which one is supposed to pay the money but the transaction date. How many people know that? If a credit card holder is due to pay today, 28 April, and does not pay until tomorrow and is one day late, he must pay interest for four or five weeks back to the date of the transaction. One does not pay one day's interest, one pays a month's interest.

These scandals should not only be exposed, because transparency is not always effective as people do not read about it, they should also be stopped. The Government's response to this motion is one of the most mealy mouthed pieces of rhubarb I have ever heard in this House.

I second the amendment and take pleasure in doing so. It seems a very reasonable thing to do because the motion is so extraordinarily woolly and there is no promise that the Minister will do anything of any consequence, even in areas clearly within his remit, according to the note which was attached to the Minister's script. His note contains things he could do which he has not done. For example, the note states, "Section 11 of the 1991 Act as amended provides that the Competition Authority may study and analyse any method of competition affecting the supply and distribution of goods or the provision of services. . . . . The Minister can also order the Authority to carry out a study." We have not even received this commitment. If we are reluctant to take action but we want to know, why can we not have this? Let us at least know. I call on the Minister to use his power to direct that study to be done so we can know exactly what the situation is.

Everybody said this is a very important debate and the nation is holding its breath. There is nobody in the press gallery and there are very few people in the House. This is one of the dullest events I have been at in years. I attempted to organise synchronised yawning in the back seats but I was prevented because of my colleague's sense of the natural decorum of this beautiful building, but that was all. There was not very much passion until Senator Ross spoke and what he said was appropriate. This is the reason Oireachtas Report is on at 3 a.m., in my humble opinion.

There is a problem with credit cards. I remember when they were introduced. As far as I remember, the card, forms and application arrived in the post. I did not ask for it, it was just given to me. I was a soft target. I put it in my wallet but I never used it. I eventually found it of considerable use when I was stranded without money in the Middle East and I got into the habit of using it. There were some problems but I hope they have been cleared up. When my bag with everything in it was stolen, it took six weeks to organise a line of credit. That is not very good for the amounts of money we are paying. We are clearly paying through the nose.

There are also unexplained items, not only with credit cards but with all those kinds of statements pushed through one's letterbox. Today I received two. One was a credit card bill. There was only a tiny amount of money on it but I was charged £19 Government tax. I do not know the reason. I must check again to see if that happens every month. I doubt it. I think the credit card companies are trying to shift part of their responsibility on to me.

Why do they send those envelopes with a space for a stamp but no stamp on it? Could they not afford a stamped envelope for us to pay the bill? The telephone company does it, as do several other companies. At least when they are ripping us off they have the decency to pay for the stamp. These absolute blood suckers do not even do that.

With the rates they charge there is a clear margin of up to 20 per cent. They go for the most vulnerable people who are least likely to be able to afford to pay their bills on time. It constitutes an attack on the weakest section of our society. This psychology is exactly the same as that of the loan sharks which we used to hear being attacked and analysed on Marian Finucane's radio programme. They go for the most vulnerable people who need the credit and cannot afford to pay it off. They enmesh them further and then increase the charges.

On the issue of obscure charges with phraseologies, I also received a gas bill. It contained a £20 charge for supplying the gas. Why should I pay for them to supply the gas? I buy it and pay for it and I paid for the installation of the meter and servicing. I pay it all. Every time I receive a computerised bill, it looks nice and neat at the bottom, but if I investigate it I find there is some sneaky charge which I really should not have to pay. Credit cards are a classic example of this.

I pitied the Minister with his supplied script. I am involved in show business and he did not put much pizzazz into it. How could he? It was so uninspired. One would need the genius of John Gielgud or Ralph Richardson to do justice to that load of cotton wool. The Minister stated, "If it were considered desirable to introduce some form of statutory control over retail interest rates, I would regard this as a matter for the Minister for Finance". That is passing the buck, shifting the blame and responsibility. He has not even taken the intellectual responsibility of deciding whether it is desirable and will not bother to institute this kind of review.

Then he invoked the market. It is perfectly obvious that either the market is not working or there is an organised cartel. I believe it is a cartel. There are happy cosy arrangements between the banks to keep within this range. The only credit card which differs significantly is the MBNA card. This raises questions about Master Card and VISA. The impression is given that they are separate entities but they are the creatures of the banks. Why do they not stand out on their own? Why are they pawns of the banks and why are we in their clutches? Why are they tied to our bank accounts?

If American Express is a truly independent operation, sourced in America, why do we not get American rates? Why is it tied to European policies? Why do its Irish customers not get the same treatment as its American customers? The reason is that it is part of a little cartel which has been arranged cosily. The Minister said that there are a number of different credit cards, gold cards and low interest cards, etc. In other words, the most privileged people will be further advantaged.

With regard to the Credit Consumer Act, it is astonishing that credit card interest charges are not covered. What could be more central to consumer credit than interest charges, which are excluded from the Act? Section 5 of the Competition Act clearly and specifically prohibits abuse of a dominant position. However, are we not confronting with this motion a breach of the law as passed by the Oireachtas?

On the issue of charges and booking fees, Senator Ross made an excellent point that customers are charged at both ends, so to speak, because the customer pays interest and the supplier must pay 3 per cent. This means that the banks are charging 25 per cent, which is outrageous. I will end with a line of that appropriate song, "Nice one, if you can get it". It appears to me that the banks are getting it, and they are getting it out of our pockets and wallets.

I welcome the motion. I wish to make it clear that the staff in local banks are decent people. They do not make the rules or regulations, they just implement them.

It is time small print was deleted from all documents. If one reads the small print, one is never any the wiser. It is time to legislate for the use of simple plain English that everyone will understand.

Last month I had an interesting experience. Although I had paid my credit card bill on time, as I always do, I was charged £7 or £9. This had been happening over a period of a few months. I was credited on a few occasions but billed subsequently in my next statement. Last month, I discussed the matter with two credit companies and was eventually credited by both of them. I owed them £35. If I were not a Senator and did not mention that I would raise the matter, would I have been credited? How many people are overcharged in this way?

I was told that if my final payment date is 28 April, I should pay my bill by 21 April because the customer is not credited until the cheque is cleared from his or her bank and lodged with them. It is not the same as paying other bills whereby if one pays a cheque, one receives a receipt. Many people are tricked into thinking that they are paying their bill on time. My problem was solved by opening a credit-debit account in the bank which ensures that my cheque is issued on time and the credit company receives it on time.

I am concerned about the euro. I was of the opinion that the introduction of the euro would result in no charges for money transactions. I travelled to England recently and discovered that there was a big charge – I was charged approximately 24 per cent interest, plus a handling charge. It is time these surcharges ended and that the Government put a cap on the profits of these companies. They are making millions of pounds profit every quarter from poor customers throughout the country. The AIB owes the people millions of pounds which the Government loaned to it approximately 20 years ago. It never paid back a penny, yet it makes millions of pounds profit. I call on the Minister to get this money back, with interest. It is high time this money was paid back because it is owed to the citizens. This money would help to re-house some poor people.

Some years ago, when I was involved in the auctioneering business, land was very expensive. I pointed this out to a bank manager and he said it was as a result of three or four small farmers getting money to bid against one another. This increases dramatically the price of property. The same is happening in respect of houses in Dublin and throughout the country because people are obtaining mortgages from the same mortgage company. These companies will lend five or six customers £120,000 or £140,000 and a house which should be purchased for £80,000 increases dramatically in price. It is time this system was stopped.

It costs about £21 per month to lease a car. After a three or five year period, and a balloon payment, the customer may own the car. If one calculates the cost over the period one will find that this is a very expensive way to buy a car. The Government must put an end to these easy options because vulnerable people think they are getting a cheap car with cheap finance, yet they pay a high price. Car leasing should be looked at.

There are many Irish-owned banks in England and America. I am sure these banks issue credit cards to their customers. How can they issue credit cards in these countries at a competitive rate of 5 to 7 per cent while they charge customers in this country 21 per cent? At present the base interest rate is less than 3 per cent but the cheapest rate at which customers can borrow money from the banks ranges from approximately 7.5 per cent to 12 per cent. This is outrageous given that the banks borrow money for less than 3 per cent. It is time a cap was put on this. Senator Norris noted that there are not many Members in the House and that the public gallery is empty. Perhaps the reason is that many people have their hand in the lion's mouth despite all the money, and one cannot pull the lion's tail if one has one's hand in its mouth.

I am pleased that I do not have to worry now about banks. However, I found the local banks very decent. I made a lot of money. If the banks had not lent me money in the beginning, I would not have made this money. That was when you knew the bank manager. You could ring him to say that you would be overdrawn for a month and he would tell you that was all right. Now we have Mr. Computer – your cheque will bounce or clear depending on what the computer says.

Sue them. I did and I won. I got ten grand.

The banks get away with murder, they have gone mad. They are filthy rich and making fabulous money. The only way to be sure that you are not charged interest by the credit card company is to pay your bill a month in advance.

It is scandalous that so many charges can be applied. We are now part of the euro zone but banks still charge as much for exchanging currency as they did before its introduction. It is a scandal that rates are so high when interest rates are so low. Unless people force the Government to take legal action we will never see a lower rate of interest on credit cards. Why would the banks reduce it? If you can get soft money why would you stop taking it? There is a cosy cartel between every lending agency which should be broken by the Government. Only the Government can put down a marker and end this cartel.

This is a worthwhile debate but, because the motion does not call on the Government to take action, I have no option but to support the amendment tabled by Senators Ross and Norris. I support that amendment because of the inactivity of the Government in relation to the high interest rates being charged by credit card companies.

In an era when some of the banks are making £1 million a day, it is high time the Government took action. Interest rates on credit cards range from 18 per cent to 24 per cent while the banks borrow this money at 2.5 per cent. It is crazy that State banks are part of the cosy cartel which fixes interest rates for credit card facilities. We should take action to ensure that State banks are not part of any cosy cartel. Pressure should be put on the ACC and TSB to lower their credit card interest rates.

Local authority members play their part in supporting the banks in certain areas. There are ATMs in every high street. The banks do not pay rates on them or for licences to operate them. In several towns, on busy holiday weekends, pedestrians have to move off the footpath to facilitate those queuing to get money from these machines. Local authorities should be taking action over this but special restrictions on ATMs do not form part of development plans. The Government should issue guidelines for high street areas where footpaths are not wide enough to facilitate long queues. People have to leave the footpath to avoid crashing into those queuing to get money from machines owned by banks, institutions which are making exorbitant profits and which pay no rates or licence fee for the facilities they provide.

They are no better than casual traders. Every local authority has put severe penalties in place for casual traders and has forced them to trade in certain areas. No such restrictions apply to the banks. This area should be looked at. The banks can afford to pay additional rates and charges because of the vast amount of money they are making. This is a national issue and local authorities should take action.

I am disappointed that the Government has not indicated that it will take action on the exorbitant charges. It is a scandal. As Senator Ross said, it is the most vulnerable in society who have to pay the exorbitant rates – those who cannot afford to pay on time end up paying the highest charges. Our banks should be made to conform with the English and American banks. The Minister mentioned that the interest rate in America is between 5 per cent and 7 per cent. We have the most expensive interest rate for credit cards in the world. This does no credit to banks which are making exorbitant profits.

The Minister should examine the banks over which the Government has direct control – the ACC and the TSB. We can put pressure on our own banks and ensure they are not part of the cosy cartel setting interest rates for credit card facilities. It is amazing that all credit cards providers charge within a couple of percentage points of each other. It behoves the Minister to put pressure on State banks to reduce the rates they charge.

I welcome the Minister of State, Deputy Moffatt, to the House. I did not come here to do some bank bashing.

Mr. Ryan

Tut tut. Sell out.

I came here to assist consumer protection. One of the first issues I raised in the House was the high level of interest rates on credit card transactions when the second largest bank in the State had announced profits of over £500 million.

We are here to condemn the criminal rates of interest being charged by financial institutions for credit card facilities. It was stated that the rates vary from the Bank of Ireland high of 24 per cent to 18 per cent charged by the National Irish Bank.

In the past Members have questioned the activities of the banks in relation to other matters such as the operation of the DIRT, non-resident and CMI accounts and National Irish Bank's additional service charges on customers. It is appropriate, therefore, that we should also examine and question the interest rates being applied on credit card transactions.

Interest rates have been tumbling and are now well into single figures – approximately 8 per cent or 9 per cent on loan transactions and as low as 1 per cent on deposit interest – that is before one loses the DIRT. This phenomenon seems to have bypassed the credit card companies, subsidiaries of the main clearing banks, which are charging on average up to 20 per cent; one company is charging as much as 24 per cent. This compares unfavourably with interest charges throughout the European Union. I read in a newspaper in the past month or so that the Dutch rates were the lowest at just over 5 per cent. There is a major difference between the highest rate here at 24 per cent and the lowest in Europe of 5 per cent.

It does not surprise me that the customers are suffering again in that they are victims of sharp practices by financial institutions which were once regarded as some of the most respected in the State. I remember a time when the bank manager in every small village and town was a friend of everybody. One never sees the bank manager now; we deal with computers.

Mr. Ryan

They are probably on the golf course.

I agree with Senator Ryan. In those days banks made their profits and covered their overheads on the difference between the loan interest rates they charged and the deposit interest rates they paid to customers.

Interest rates and charges are not the only elements that come into question. In regard to bank charges, customers do not know what they are being charged. I recall an occasion when a backbench Senator went through her bank statement to see what she was being charged but it was complicated. She could not understand some of the transactions that appeared on the statement.

Another item I refer to on many occasions in this House and which, as a practising accountant, I regularly see on my customers' bank statements is referral charges. A simple telephone call or examination by a bank official would determine whether a customer would benefit from an additional few thousand pounds on an overdraft, yet they continue to allow that customer to be charged referral charges. It is commonplace for customers to pay up to £1,000 on unnecessary referral charges. That is the banks' priority – they want to make profits to pass on to their shareholders. That practice is immoral and the sooner it is stamped out, the better.

It is immoral also that a bank such as AIB can make pre-tax profits of £826 million in 1998, an increase of 42 per cent on the figures for the previous year. Its credit interest charges are less than those of the Bank of Ireland. In its annual report, AIB stated that 47 per cent of its profits came from the domestic market and it was happy to state that that included good profit growths from credit cards. The bank is praising itself for achieving a high level of profits from credit card transactions. Mortgage rate levels have also been called into question and many people, as has been proved, have received refunds.

There should be competition in this area but the real problem is the cosy cartel that operates among the main banks in the country at the consumer's expense. At the launch of its report, the AIB's chief executive also stated that the time may have come to review credit card charges within the context of lower European rates. That time has come. The bank has increased the commission charges on exchange transactions to try to make up for the loss of the charges on currency exchange transactions. It has not yet recouped its full profits on that increased commission so it will continue to keep up the level of credit card interest charges.

Consumers who can and cannot afford to pay have been the victims of a scam. I know cases where the banks engaged in moneylending rather than banking for customers who could not afford to pay the charges. The banks bring in inexperienced staff at the end of the month to check the limits on credit cards but they would be better off examining in detail the accounts of people who cannot afford to pay but who they allow to use the facilities. They should stop annoying business people who overlook paying their balance at the end of the month, including me. I forgot to make a minimum payment of perhaps £126 on a £7,000 or £8,000 account and the bank telephoned me day after day about it. I deliberately do not pay because of that annoyance.

I compliment my colleague, Senator Cox, who did an excellent marketing job earlier for the Bank of Ireland. Regardless of the statistics, the level of interest charges on credit cards is immoral and the Government should act to have it reduced immediately.

I am delighted we are having this debate tonight. I support the amendment because the Government motion, while worthy, does not go far enough. Something needs to be done immediately in this area.

I cannot understand how those involved in issuing credit cards assess how one is worthy of credit. They are prepared to lend me enough money to put down a deposit on a small house, even in these times, but some of my colleagues who are very credit worthy find it almost impossible to get a credit card. They are non-EU national doctors who are holding together our medical service in a large part of the country, particularly outside the major centres.

This problem was brought to the attention of the banks some time ago because it had become impossible for non-EU doctors to get a credit card. That is important to them because it is an easier way to use money rather than dealing with cash. Anyone who is not strictly Caucasian is regarded as an asylum seeker or a refugee and we all know the abuse and the attacks such people have had to suffer. Non-EU doctors in this country have faced enormous difficulty as a result of this problem which has been highlighted in the press and on the radio.

To determine whether the problem was widespread, one non-EU doctor did a survey of 22 of his colleagues and discovered that the majority of them had been refused credit cards while others had great difficulty in getting one. It was not just a question of age because in one city a locum consultant from abroad had difficulty getting one also. We are told that the police are trying to ensure there is no racism within its ranks and perhaps the banks should examine this question carefully also. I was disgusted to hear that people were experiencing this problem. We have all noted that the most vulnerable people pay the highest rates. Fifty per cent of people pay their credit card bills on time and do not incur charges. The 50 per cent who do not pay are those who have the greatest difficulty. A colleague asked me to refer to stress-related diseases suffered by those who have difficulty paying debts and who are constantly striving just to keep up interest payments. This man is not a psychiatrist but a gastroenterologist. He often feels like telling people that their stomach pains are due to banks. Many vulnerable people are in such difficulty with debt that they suffer psychosomatic effects which lead to further difficulties.

This is not an exercise in bank bashing. We all deal with banks daily but the most privileged do best from banks and the most privileged in the banks do best of all. One only has to compare bank directors' pay with staff pay, particularly the pay of those brought in on various schemes, some of whom are on contract. Some of those hired years ago are paid less than recently recruited staff as banks are having such difficulty filling places. There is considerable inequity within banks, not just in the manner in which they treat customers but in how they treat staff. Perhaps we could extend the debate to consider this latter point.

I have not heard all the debate but we are overlooking some fundamental issues. I am not an advocate for banks but it is important to mention these issues. Credit cards have led to an unprecedented explosion in consumer borrowing. These cards are a means of paying bills by ways other than cash and might be more accurately described as "convenience cards".

Banks never intended credit cards to be used to borrow money. They have certain rules and regulations – if one extends one's borrowing level one has to pay. The same applies to overdrafts – if one exceeds one's overdraft one is surcharged by 4 per cent or 5 per cent. There is nothing one can do about this but pay up. That is the rule by which one obtains an overdraft. Similar rules govern how one obtains a credit card, one of which is that one pays on time. Credit cards were never intended as a means of borrowing money but of settling transactions by means other than cash.

This situation has led to abuses. It is easy for people to purchase goods on impulse with credit cards. They may think twice about spending a £20 note on an item but a credit card does not have the same deterrent value. It is easy to purchase by credit card and a lot harder to pay the money back. We must acknowledge these facts.

Credit cards make a substantial contribution to bank profits. The banks' annual accounts never itemise these issues and one never knows from where the majority of their profits come. Much profit comes from lending money. Other speakers have noted that banks borrow money at 1 per cent or 2 per cent and lend it at 10 per cent – overdraft rates have hardly been reduced in the past two years. We should concentrate on overdraft rates as this is the source of the bulk of the banks' profits. Credit cards were not intended for borrowing money but many business people operate on overdrafts. Even if they pay a nominal 10 per cent or 11 per cent, if they exceed their limit they are charged an additional 4 per cent. This can amount to large sums of money every year. It is hard for banks to justify their overdraft charges.

We must also remember that banks are making profits deemed exorbitant by many people. These profits have to be maintained. There would be bedlam if banks informed shareholders that their profits had dropped by 50 per cent. Banks have to maintain this level of profit for so long as the Celtic tiger continues to roar. This will cause additional problems as they will obtain money by whatever means possible to maintain these profit levels.

I know of an instance in which an individual approached a bank for a donation to a community project. The bank said that it could only donate a few hundred pounds because of pressure from above to continue to increase profits. We must address these issues. This subject is much broader than credit cards and I would have liked the debate to be more widely cast. Credit card rates are important for many people but they are not a national scandal. There are rules and regu lations governing credit cards. If one abides by those rules one pays nothing – if one cannot abide by them, so be it. The same applies to bank loans and overdrafts. One's overdraft account must be in credit for 30 days every year or one is penalised. We should include these issues in this debate. I agree with sentiments expressed but we cannot ignore these fundamental issues.

Mr. Ryan

I admire Senator Caffrey's charity and his capacity to forgive.

Those are the rules.

Mr. Ryan

Banks are the great parasites of society. I use the word "parasites" in the technical sense – organisms which are necessary for life but which live off other living organisms. We cannot live without the banking system but the Irish system contributes nothing to our economic activity nor is it a driving force for growth.

Senator Ross has often pointed out that the banks' pension fund managers are inept and incapable of matching the performance of the market in handling investment portfolios. The average citizen who wanted to invest in the stock market would be better advised spreading their investment over seven, eight or ten blue chip companies. They would do better than any of these allegedly super-duper financial advisers. The banks are appalling employers with a magnificent capacity, because of their profitability, to spend an enormous amount of money on glossy PR. However, the truth is they have inhibited many areas of industrial development and closed down manifestly viable businesses. They are not closing them down at present because there is a great deal of money in the country. In the 1980s when things were difficult for them banks put their own very limited interests and their limited focus of maximising returns to their shareholders ahead of making sensible decisions.

I know of a business in Cork, a campus company in the hi-tech sector which had a full order book, in an area of considerable potential benefit to the State, but with a cashflow problem. They had solid orders from reputable international firms and one of our two banks closed that company down for the sake of £50,000. The order book was worth the best part of £1 million. The bank manager knew it would look better on his record to have dealt with the company in that fashion than to have taken the minuscule risk involved.

I have no problem on returns on work or investment which are somehow related to risk. When people invest of their own free will in high risk areas, inevitably the returns are high. However, in the case of the banking sector, there is a combination of zero risk and scandalous returns. Senator Caffrey is right that it is not just on credit cards that they rip off the nation. There is a myth abroad, with which I am surprised people let them away, that we are in an era of low interest rates. The only way to measure interest rates is in terms of the rate of inflation as it is real interest rates which are critical. Real interest rates are about 5 or 6 per cent, in the case of overdrafts closer to 11 per cent and credit cards around 19 per cent.

When I first had a job 25 years ago in the late 1970s, real interest rates were negative. The interest rate on an overdraft was lower than the rate of inflation. If people think it is a coincidence that since then every financial institution has had an obsession with inflation they are more naive than I thought. The banks were burnt because of the existence of negative interest rates relative to inflation. They have created an appalling consensus ever since that they are the guardians of sound money and that a measure of the soundness of an economy is the scale of the profits of the banking sector. Credit cards are an extreme example of this.

Those of us who have credit cards which are not in credit do not deserve much sympathy. However, it is a manifestation of the fact that there is no real competition in the banking sector. They have effectively agreed cosy arrangements. Nobody picked up a telephone to do this and no deals were signed between Lochlainn Quinn and whoever in the other banks – I have to be careful when I talk about Lochlainn Quinn, for obvious reasons. They know what is comfortable and they fix each other's salaries in the same way.

I will explain how simple this is to do. Salaries of directors are approved by vote at the AGM. If any stroppy shareholder objects the vote is based on shareholdings. The institutions hold most of the shares and they will vote down any recalcitrant who suggests the £250,000 salary for a director of a small bank such as Permanent Life is obscene, which, at two and a half times the Taoiseach's salary, it is. Who are the institutions? They are the people who assume that in their institution they will be paid exactly the same amount and they will not allow anyone to break the circle where their salaries are fixed to their satisfaction at rates which are entirely disproportionate to their performance. Nobody argues with them.

The prissy wording of this motion disappoints me. The banks deserve a great deal worse than Fianna Fáil's proposal. They are a disgrace in terms of how they treat their employees and how they treated them in the 1980s. They abused high unemployment like nobody else in this State. They kicked out a generation and replaced them with young people, giving them insecure jobs with low wages. They are uncompetitive and unhelpful to industry. In the 1970s they had to be dragged into the mortgage business. One would think now from the way they talk that they invented it, even though it was the State which coerced them into it.

Now they have found a new cash cow in credit cards and because people are in the nature of their lives somewhat disorganised, they have a wonderful opportunity to cream off a large percentage of incomes. They are doing so with great success. It is extraordinary that the only place where they are under the influence of some kind of competitive force is in the United States, where they make the market work. In Ireland there is a market for the small person and a quasi-monopoly for big business. We give the privileges of monopoly to big business in all sectors. We do not really have a market economy – if we had the banks would not be able to do this. I support the amendment.

Senator Ryan often argues his case in a strange way. He said that if someone does not owe money on their credit card, they do not pay any money to the banks. As Senator Caffrey said, this is the crux of the matter. I do not want to defend banks in any way as I do not have any sympathy for them. They make enormous profits and charge a huge amount of money for the provision of credit cards. However, it is not fair to say they are appalling employers, uncompetitive, unhelpful to industry and that they have now discovered a new cash cow. If they treat their employees badly why are they not leaving?

Mr. Ryan

They are. The yellow pack workers are gone.

Yes, they are gone but many people working for banks are happy to do so and are well paid for it.

Mr. Ryan

They wait until they are 50 years old to kick them out.

It is political opportunism for someone to turn a debate on interest rates on credit cards into bank bashing. This is what we have come to expect from the Labour Party. Senator Caffrey made one of the best contributions and spoke about how we use credit cards. If people look for additional credit, they should look for different sources for it, not pay the high interest charged by banks and thus not contribute to their huge profits. This Government motion is balanced. It calls on the Minister for Enterprise, Trade and Employment to investigate the issue in regard to competition and high interest rates. It shows the way we are going about this and that we are not just condemning everything we hear about on the radio or television, where people on chat shows say how bad it is.

Only 21 per cent of adults in this country have a credit card; of those, 74 per cent pay their bills on time. It is the people who do not pay their bills on time and do not read the small print who have a grievance.

We have talked about a code of transparency, of which this Government is supportive and for which it is pushing. If we move down that road, in a very balanced and fair way, we will treat everyone equally. If one runs a business in this State one is entitled to make a profit, whether it is hundreds of thousands or millions of pounds. The day when one is not entitled to make a profit in this country is the day we might as well give up and go home.

We have called on the Minister to investigate the matter. A number of Senators said the Government is doing nothing. I remind them the Minister stated he will be bringing the concerns to the attention of the Minister for Finance, the Central Bank and the Director of Consumer Affairs. That is why we have those institutions and people. He will be discussing with the Tánaiste the options open to the Competition Authority. He also said he might undertake an investigation or a study of the method of competition affecting the determination of such interest rates.

It is not in anybody's interests to have high interest rates charged by credit card companies. That is not what we are about. However, it is ridiculous to say we must "take immediate steps to reduce the indefensible interest rates being charged by the banks". I ask the Opposition to withdraw its amendment, support the Government's motion and allow us to do this in a balanced manner, where we can look at the whole area of banking, particularly the high interest rates, and do something for the benefit of all the people.

Amendment put.

Burke, Paddy.Caffrey, Ernie.Coogan, Fintan.Cregan, Denis (Dino).Gallagher, Pat.Henry, Mary.McDonagh, Jarlath.

Norris, David.O'Dowd, Fergus.Ridge, Thérèse.Ross, Shane.Ryan, Brendan.Taylor-Quinn, Madeleine.

Níl

Bohan, Eddie.Bonner, Enda.Cox, Margaret.Cregan, JohnFarrell, Willie.Finneran, Michael.

Fitzgerald, Tom.Gibbons, Jim.Glynn, Camillus.Keogh, Helen.Kiely, Daniel. Lanigan, Mick.

Níl–continued

Leonard, Ann.Lydon, Don.Moylan, Pat.

O'Brien, Francis.Ormonde, Ann.Walsh, Jim.

Tellers: Tá, Senators Ross and Norris; Níl, Senators T. Fitzgerald and Keogh.
Amendment declared lost.
Question put: "That the motion be agreed to."

Bohan, Eddie.Bonner, Enda.Cox, Margaret.Cregan, JohnFarrell, Willie.Finneran, Michael.Fitzgerald, Tom.Gibbons, Jim.Glynn, Camillus.

Keogh, Helen.Kiely, Daniel.Lanigan, Mick.Leonard, Ann.Lydon, Don.Moylan, Pat.O'Brien, Francis.Ormonde, Ann.Walsh, Jim.

Níl

Burke, Paddy.Caffrey, Ernie.Coogan, Fintan.Cregan, Denis (Dino).Gallagher, Pat.Henry, Mary.

McDonagh, Jarlath.Norris, David.O'Dowd, Fergus.Ridge, Thérèse.Ross, Shane.Ryan, Brendan.Taylor-Quinn, Madeleine.

Tellers: Tá, Senators Tom Fitzgerald and Keogh; Níl, Senators Norris and Ross.
Question declared carried.

When is it proposed to sit again?

At 10.30 tomorrow morning.