Amendments Nos. 2 and 3 are related and may be taken together by agreement.
SECTION 2.
I move amendment No. 2:
In page 9, subsection (1), lines 1 and 2, to delete "or a member of the Garda Síochána".
This is a technical point that was raised in the course of the consideration of the Bill. The argument was made that this provision means every garda would be in a position to act as an authorised officer. It was argued that section 7 of the Bill allows for the appointment of authorised officers by the Minister and the Director and that, in relation to moneylending, specific powers are laid down for the Garda. It was argued that it was excessive to have every member of the Garda being an authorised officer for the purpose of seizing or investigating books and that one should content oneself with those appointed under section 7, where there is centralised authority controlling the purpose for which they are appointed. What is the Minister's view on that?
On a point of clarification, are we taking the two amendments together?
Yes.
I can accept the thrust of Deputy R. Bruton's amendment. However, in relation to unlicensed moneylending, it is essential that members of the Garda be authorised officers for the purpose of the Act. It is not the intention that officers of the Director or officers of the Minister should pursue unlicensed moneylenders, a task which I consider to be more appropriate to the Garda Síochána. For this reason amendment No. 3 restricts the general authorisation of the Garda Síochána to Part VIII of the Bill, which deals with moneylending.
I would also draw the Deputy's attention to section 7(6) where an authorised officer appointed under that section may, where he or she considers it necessary, be accompanied by a member of the Garda Síochána when performing any powers conferred on an authorised officer under the Act. In Part VIII, where a number of provisions deal with criminal activities to which one could not expect a civilian officer to respond, the Garda Síochána are given a stand-alone role. I accept the thrust of what Deputy R. Bruton has proposed, but I would hope that the purpose of amendment No. 3 is to remove the superfluity. We have taken the spirit of Deputy R. Bruton's amendment and given it a clearer direction.
Amendment, by leave, withdrawn.
I move amendment No. 3:
In page 9, subsection (1), line 1, after "or" to insert "in relation to Part VIII”.
Amendment agreed to.
Amendment Nos. 5 and 11 are related to amendment No. 4 and all may be discussed together.
I move amendment No. 4:
In page 9, subsection (1), to delete lines 3 to 7.
It is proposed in this amendment to substitute for the definition of "a bank" the new definition of "credit institution". It encompasses all of the deposit taking and lending financial institutions which are encompassed already by licensing or authorisation schemes governed by Acts of the Oireachtas or regulations under the Acts. By drawing those entities together under one heading we can provide greater clarity and simplicity in the Bill. It parallels other Bills of the Houses of the Oireachtas and terminology used in European regulations.
For clarification, is amendment No. 11 substituting the definition "credit institution"?
We are removing the narrow definition of the word "bank" and replacing it by the words "credit institution".
Are we bringing in for the first time life assurance? Is the purpose of amendment No. 11 to bring in any new body or is it just a technical amendment? Life assurance seems to appear there for the first time.
They are notified as credit institutions. The purpose of the amendment is to widen the definition of those who give credit from the narrow one of what one interprets a bank to be into "credit institution".
Amendment agreed to.
I move amendment No. 5:
In page 9, subsection (1), to delete lines 12 and 13.
Amendment agreed to.
I move amendment No. 6:
In page 9, subsection (1), line 17, after "transaction" to insert "for the purchase of goods by a consumer".
This amendment deals with the purchase of goods by a consumer and provides greater clarification in the definition of cash price.
Presumably consumers can buy goods or services. Is that an unduly restrictive definition?
We are widening it. The addition of the words "for the purchase of goods by a consumer" provides greater clarification in the definition of "cash" than the definition of "cash price".
Deputy Bruton' point is a reasonably good one. It might be worthwhile if services were on sale in one shape or form and somebody signed an agreement which tied them into some payment. I do not see how one can distinguish between goods and services where somebody is dealing as a consumer.
And for which they are paying money.
For instance, painting one's house or something like that.
Having consulted my officials, I agree with the points put forward by both Deputy McDowell and Deputy R. Bruton in that respect. However, we are in the Chairman's hands as to how we can transpose that.
Report Stage may be the time.
Is it acceptable to the Deputies to deal with the matter on Report Stage? Agreed.
I am willing to insert it on that stage. I thank both Deputies for their recommendations.
Amendment agreed to.
I move amendment No. 7:
In page 9, subsection (1), line 23, before "person" to insert "natural".
Chairman, this is slightly more than a technical matter in that it was alleged that saying "person" and not a "natural" person could bring in all forms of commercial loans into this legislation. The purpose of this Bill is to protect the consumer and not to apply its various rules to companies. The Minister accepts that, so there is no need for us to dwell on it.
We are ad idem on the amendment. How natural is “natural”?
Amendment agreed to.
I move amendment No. 8:
In page 9, subsection (1), lines 27 and 28, to delete "for the duration of the agreement".
These words are recommended for removal because they contain an implication that the ownership of the goods may be transferred at some time. This would be contrary to the practice of consumer hire and would render the agreement one of hire purchase. It is a technical point which was put to me by the Director of Consumer Affairs. He feels that deleting those words would be a better way of transposing it.
Has the case of retention of ownership of goods reared itself in this section? The supplier of goods will maintain that ownership remains with them until they are paid for the full? Would that impinge on this section?
In a consumer hire agreement, as distinct from any other hire agreement, they are never paid for in full.
They are leased.
Yes.
Are credit agreements covered by this provision?
That is a different matter. This amendment deals with consumer hire agreements. We took advice for the purpose of this amendment. It was clear, when it was explained to us, that we had to be precise in what was meant by consumer hire agreement.
It might be worthwhile to exclude what Deputy Flood said and instead say "other than agreement for the sale of goods."
Deputy McDowell is extending that further.
Deputy Flood is saying that a court might say that one is giving the person the goods as bailee for the purpose of selling them later.
There is a separate section dealing with that, but I will look at this matter again because there are implications which could arise in its interpretation in a court.
Which part of the Bill governs these lease or consumer hire agreements?
They are governed by section 7.
On Report Stage we will return to this amendment and section 7, which, inter alia, deals with consumer hire agreements.
Amendment agreed to.
Amendments Nos. 9 and 10 are related and both will be discussed together.
I move amendment No. 9:
In page 9, subsection (1), line 35, after "Directive" where it secondly occurs, to insert "No.".
Amendment agreed to.
I move amendment No. 10:
In page 9, subsection (1), line 39, after "Directive" to insert "No.".
Amendment agreed to.
I move amendment No. 11:
In page 10, subsection (1), between lines 3 and 4, to insert the following definition:
"‘credit institution' means—
(a) the holder of a licence granted under section 9 of the Central Bank Act, 1971,
(b) a body licensed to carry on banking under regulations made under the European Communities Act, 1972,
(c) a building society incorporated or deemed to be incorporated under section 10 of the Trustee Savings Banks Act, 1989,
(d) a society licensed to carry on the business of a trustee savings bank under section 10 of the Trustee Savings Banks Act, 1989,
(e) a life assurance undertaking which is the holder of an authorisation under the Insurance Acts, 1909 to 1990, or under regulations made under the European Communities Act, 1972,
(f) ACC Bank p.l.c,
(g) ICC Bank p.l.c:".
May I clarify the introduction of life assurance undertakings in this amendment. Does this extension mean a change for life assurance undertakings or the sections of the Bill now applying to them that would not have hitherto? Are they giving significant additional protection to the consumer?
Deputy R. Bruton has picked out paragraph (e), which states that "a life assurance undertaking which is the holder of an authorisation under the Insurance Acts, 1909 to 1990, or under regulations made under the European Communities Act, 1972." It is an itemisation rather than a giving of any further powers.
One would not normally consider life assurance under "credit institution".
It is tied up with mortgages. All endowment mortgages are accompanied by life assurance. It is not giving any further powers but is clarifying the issue.
Obviously, the Minister does not propose to bring credit unions into this section.
Credit unions are subject to separate legislation, which is currently being formulated by my colleague, the Minister for Employment and Equality, Deputy Quinn.
Amendment agreed to.
I move amendment No. 12:
In page 10, subsection (1), to delete lines 4 to 6 and substitute the following definition:
"‘credit intermediary' means any person, other than a credit institution, who in the course of his business arranges or purports to offer to arrange the provision of credit or a consumer hire agreement in return for a commission, payment or consideration of any kind from the provider of the credit or the hirer, as the case may be;".
It is proposed to substitute the definition of a bank and building society with the new definition of a credit institution, which encompasses all deposit taking and lending financial institutions which are encompassed already by licensing or authorisation schemes governed by Acts of the Oireachtas. By drawing these entities together under one heading, we could provide greater clarity. It is also used in other Bills, regulations and terminology.
Where we enlarged in previous amendments on the scope of a bank by making it a credit institution, we are now asking to delete lines four to six and to substitute the following definition: "‘Credit intermediary' means any person, other than a credit institution, who in the course of his or her business arranges or purports to offer to arrange the provision of credit or a consumer hire agreement in return for a commission, payment or consideration of any kind from the provider of the credit or the hirer, as the case may be." The purpose of this amendment is, first, to substitute the new definition of "credit institution" and, second, by the addition of the words "in return, for a commission, payment", to purposefully exclude from the provisions concerning credit intermediary, professionals acting for their clients, such as solicitors, accountants and such like who might in the course of their duties arrange credit with a credit institution or credit intermediary for that client.
This only applies when the professional is asking for his client and not as an intermediary for a credit institution or any other lender and is receiving no consideration or remuneration for the action other than the fees paid to him by his client. That would equally apply to members of voluntary organisations who exist to help those who are disadvantaged in matters like this.
Would a money lender fall within this category if they employed a person to collect credit and paid them by commission of some sort?
Whatever they brought in.
Pay them by commission of some sort. Do they fall within this category?
This section deals with somebody getting rather than collecting credit. I see the point raised by the Deputy because some collection agencies employ people to collect credit.
I may return to the matter as it may not be relevant at this point.
It is not relevant at this point. This issue was brought to our attention by various groupings. I am aware that there is a very thin line sometimes with professionals who rightly offer their services to their clients, for example, undertaking their legal business in the purchase of a house, and in the course of that undertake to make representations and put forward the case for the mortgage for their client. That is within the scope of their duties and we do not mean to exclude that.
However, we are also clear that we do not want to see emerging a professional person who would deal with just one agency for the provision of that mortgage. In this respect, we sought to be precise in the proposed wording. It is acceptable if the professional is engaged in his or her duties for the client who asks him or her to get a mortgage, or if a voluntary organisation wishes to help people. It is not acceptable if the purpose is to be directing them one particular way.
Amendment agreed to.
I move amendment No. 13:
In page 10, subsection (1), between lines 23 and 24, to insert the following definition:
"‘credit intermediary' means any person, other than a credit institution, who in the course of his business arranges or purports to offer to arrange the provision of credit or a consumer hire agreement in return for a commission, payment, or consideration of any kind from the provider of the credit or the hirer, as the case may be;".
The purpose of this amendment is that otherwise or else throughout the Bill, the term "total cost of credit" is used. It is appropriate that within part 16 of hire purchase agreements, the term "hire purchase price" be used as was used in the Hire Purchase Acts. These Acts are being repealed by this legislation, but we wish to preserve their intent.
Under the hire purchase section there is the cash price, which is the price for the goods. The Minister is now defining a sum of the total payments, which would include the interest element.
All payments.
All payments. What exactly is the purpose of defining this price? It is not a price that would be in common parlance and presumably it changes with interest rates. For example, does this have a bearing on section 61 (2), where people can claim half the total cost of credit, or that in recovering goods they can get up to half the total cost of credit? Is a more elastic concept being given to people to recover more from a hire purchase agreement than was envisaged by this definition?
What we propose is clearer for the consumer. When I was involved in the consultative period of this Bill, with which all the Deputies were involved, I am sure, especially the party spokespersons, I constantly sought to make the matter clear. Many amendments were proposed, some of which we rejected and we accepted others.
I want to ensure that the consumer has transparency, that he or she would be able to consider the product on offer, compare prices, know the total cost, the terminology and what the transaction is all about. The Bill is a first step, and many other types of explanatory Bills will have to come forward for the consumer.
If the total cost of credit otherwise throughout the Bill is used, it is appropriate that within part 16 in hire purchase agreements, the term "hire purchase price" be used as was used in the Hire Purchase Acts. Under the Hire Purchase Acts, the term "hire purchase price" means the total sum payable by the hirer under a hire purchase agreement in order to complete the purchase of the goods to which the agreement relates, exclusive of any sum payable as a penalty or as compensation or damages for a breach of the agreement. Even though the Hire Purchase Acts are being repealed I wish to keep the intent and the purport of this aspect of the Acts within the Bill.
There appear to be different definitions in operation. Section 58 appears to define what a hire purchase price is and section 61 (2) deals with the powers of recovery when people default. Under that, the hirer can recover half of the total cost of credit. Are these interlinked in some way? I do not understand what the Minister's definition purports to do over and above the provisions set out in section 58 and whether it has knock on effects in other sections and in Part VI of the Bill.
In other sections of the Bill, as it was considered through the various consultations, the thrust of various Acts which are repealed in whole or in part are subsumed. We sought to keep the purport of the Bill, as far as we could, in the explanations we were making and that is one of those explanations.
Regarding the definition of hire purchase price, does the Minister have any comment to make on a lease agreement, which is almost the same as the hire purchase arrangement, where a lease might be undertaken with a guarantee that at the end of the period of the lease the product, for payment of a very small sum, becomes the property of the person who undertook the lease in the first place?
This refers to the earlier question regarding the consumer hire agreed and we agreed to consider the matter again.
In that context, the difference between the two is that there can be a long term consumer hire agreement where there is not an absolute right to purchase the goods at the end of it. There may be a primary leasing period followed by a subseqeunt leasing period at a nominal amount, but if the goods are never vested——
That is under the consumer hire agreement.
The difference between leasing contracts and hire purchase contracts is that there is a right to get the property and the goods transferred under hire purchase contracts eventually, whereas under a leasing agreement there is not.
Eventually there may be, but there is not a priori.
Amendment agreed to.
I move amendment No. 14:
In page 10, subsection (1), line 26, to delete "and" and substitute "or".
This is a textual amendment to keep the definition of house in line with the definition used in various housing Acts.
There is another "or" later on.
Amendment agreed to.
I move amendment No. 15:
In page 10, subsection (1), line 32, after "interest" to insert "or is to be secured on the consumer's principal place of residence".
This is the Deputy's "or" now.
I wish to clarify this definition of housing loan and I am not convinced that the amendments I have put down have dealt adequately with it, but this is the definition that triggers Part IX of the Bill, and, via the definition of the mortgage lender, it also triggers exemptions from sections 45 to 48, which are the exemptions from any challenge to the cost of a loan being excessive or the terms being unduly burdensome. I do not want to see these exemptions in the first place, as the exemptions from 45 to 48 are wrong. Every credit institution should be equally open to challenge. If the Government insists on those exemptions I do not want them applied where people have borrowed for the education of their children, with their houses as security. We want added protection in such cases so that spouses are notified if there is a threat to houses as a result of secondary loans. What is the Minister trying to achieve in this definition of a housing loan?
My amendment uses the word "or" instead off "and". The way it is framed suggests that investors availing of section 23 would have the protection of the loan so that one could buy numerous houses and have this protection. Building societies and others regard this as unduly onerous. I fear we could throw out the baby with this housing loan definition in that we are giving away exemptions in certain sections of the Bill.
Section 2 (1) defines a housing loan. Paragraph (a) defines it as being for the purpose of purchasing, providing or improving a house. Frequently a remortgage—
A second mortgage.
—is not for that purpose at all. This brings us to paragraph (b). I cannot see how a remortgage is a purchase. If I decide to have a second mortgage on my house or restructure my personal finances, it could be argued by a credit institution that this is not for the purpose of buying, redecorating or enhancing the house but——
To give you money at that moment.
——for buying a yacht or educating my children. I am worried that paragraph (a) is a little restrictive. I would prefer to see a housing loan being one where the house is provided as security. Paragraph (b) states that "the house is to be used as the principal residence of the borrower or his dependants".
Is the Deputy speaking on Deputy Bruton's amendment or on the Bill?
To both. If I was remortgaging my house and wanted to provide it as security for a loan, why should it be used as a principal residence? If I have a second house or if I live in a flat in Galway some of the time and in a flat in Dublin for the remainder of the time, which is the principal residence? I am a little scared of narrowing it down too much.
My amendment seeks to do what Deputy McDowell suggests. It seeks to insert after the word "interest" in paragraph (a) the words "or is to be secured on the consumer's private residence" This would mean that any loan secured on the principal house would be a housing loan. A complicated aspect of this definition is that a mortgage lender is a person whose business includes giving housing loans. The exemptions provided for in sections 46 to 48 apply to mortgage lenders. By a chain of events, on the one hand secured loans are being given the protection of housing loans but, on the other hand, lenders are being exempted from pursuit by the Director of Consumer Affairs.
Deputy Bruton clearly showed the conflicting issues presented to him by those with whom he spoke. The same was presented to me in the consultative process, which I welcomed because it greatly enhanced my knowledge of the matter.
The two amendments put down by the Deputy would affect the definition of a housing loan which is of critical importance to the treatment of housing mortgage credit. I wish to expand on the definition of a housing loan in the Bill and also in a general way to outline for Deputies the matters which we considered before deciding on the current definition. We know that housing mortgage credit must be regarded as a separate category of lending. It is governed by the law of mortgage, which is an extensive code of law. We have to be careful that we do not inadvertently create problems in this area through the inclusion of inappropriate provisions in this Bill. That is why the main provisions relating to housing loans are provided for separately in Part IX of the Bill. The housing loans are specifically excluded from other provisions which are unsuitable.
An EU Directive, which is six or seven years out of date, gave rise to this Bill. The Bill was originally intended to deal with the repeal or subsuming of older Acts, moneylending, advertising of credit, and transparency. As we prepared the Bill it became clear that the biggest consumer purchase people make in their lives is the purchase of their houses, although they may have business purchases which would be of larger value. To exclude the purchase of a home from the provisions of the Bill seemed wrong. I took that decision in conjunction with the Minister for the Environment, Deputy Smith. We then went into the arena of housing Acts, which are the responsibility of the Department of the Environment, and other matters not included in the original Directive.
This is why we had to be careful about moving into the area of housing loans. Unlike other forms of credit, housing loans will not be made unenforceable because of non-compliance with the requirements of the Bill, because they are already governed by the mortgage contracts which would have been undertaken. The ten day cooling off period, which is appropriate to safeguard consumers against impulse buying, will not apply to housing loans as such loans could not be classified as impulse buying. The consequences of such a classification could be the erosion of security, an incrase in interest rates and greater difficulties in switching. It would be anti-consumer. Hence the definiton of a housing loan is wide. It covers mortgage loans to borrowers to purchase, provide or improve a house. It also includes — this is related to Deputy McDowell's point — loans for any consumer purpose secured on a house which is used as the principal residence of borrowers or their dependants. This includes education loans, loans for financing existing consumer debt and loans involving the switching of mortgages from one lender to another which are secured to the principal residence of borrowers and dependants and are treated as housing loans.
If I have a house in Dublin and a flat in Galway and decide to raise money using the flat as security, it would not be covered by paragraph (a) of the definition of a housing loan and I would not get any protection. Why does it have to be the principal residence?
Loans for which principal residences are provided as security are treated as consumer transactions and are subject to consumer credit regulations.
With regard to Deputy Bruton's two amendments, the definition of housing is very wide so as to ensure that housing mortgage credit is dealt with properly and at the same time not subject to inappropriate provisions. The existing definition of housing is reasonably clear and these two amendments would introduce a great deal of confusion. According to my interpretation, what Deputy R. Bruton has put forward would differ from that in the Bill in the following respects: Holiday and second homes would be excluded from the definition of housing loans because whereas the definition in the Bill covers any house purchased, provided or improved by a consumer with the aid of a housing loan, the effect of the amendment substituting "and/or" for "or" would be to confine housing loans to the principal residence of the borrower, consumer or his dependants.
There is also the issue of non-dependent spouses whom Deputy R. Bruton mentioned — he said that he would see the need to inform the spouse about what was happening. A mortgage to provide a house for the spouse of a borrower who is not a dependant would be excluded if we accepted these amendments. Such mortgages might arise in the context of a marital separation because the house — the subject of the mortgage — would not be the principal residence of the borrower's dependants. This would create a great deal of confusion. It would also apply in the case of a parent buying for an non-dependent son or daughter or, indeed, a son or daughter buying for a parent. Deputy R. Bruton mentioned the fact that the building societies et al had put forward this point of view to him, as they did to me. They wanted to narrow the scope and I did not go along with their proposed amendment.
What if an unscrupulous lender decided to arrange their loan so that it was secured on the house and then got exemption under section 46 from any challenge to unreasonable rates of charge? Is it an impossible scenario that we would have a new brand of moneylender peddling loans secured on the house with exemption from each challenge in relation to their charges or terms of loan?
Secondly, is it reasonable for this definition to mean that one could buy hundreds of homes under this scheme? One could become an entirely commercial operator purchasing homes under section 23 or whatever and they will still be called housing loans with all these provisions. Is that perhaps unreasonable?
Fanciful.
I do not know whether it is. I do not know how people become involved in buying a large number of houses, a block of apartments or whatever. In normal parlance we would not call those housing loans or expect that a Consumer Credit Bill would give such people protection.
The Deputy has posed two different questions there. The first was: could an exemption of the interest rates from the Consumer Credit Bill, 1994, lead to unscrupulous people setting up businesses giving loans at exorbitant rates? Is that not what he said, more or less?
Secured on the home.
Yes, secured on the home. I know that the Deputy had difficulty with the macro setting of interest rates when the Bill first came out and on subsequent occasions when he was commenting on it. The Consumer Credit Bill, 1994, did not allow us to review, alter, comment on or change interest rates, which is why they are not in this Bill.
The second point which the Deputy raised was in relation to a person buying a block of apartments or several houses. I would assume that such a person is a business person and not a natural consumer. He or she would be in the business of buying and selling houses and would not be deemed a natural consumer. The Deputy's amendments would give rise to many practical difficulties for people who have to engage in second purchases for whatever reason. These amendments seek to narrow it and to make it unduly obstructive to do so.
Accepting that argument for a moment, would the Minister return to my general query? I cannot see why, as Deputy R. Bruton points out, a housing loan in respect of (a) means that one can borrow to buy section 23 apartments but if one is remortgaging it only applies to one's principal private residence. If one happens to own two properties, I cannot see why one should only get protection under the Act in respect of their principal private residence.
I take the Deputy's point as to why should we put in the words.
The Minister could delete the words "the principal residence" and replace them with the words "a residence" of the borrower and the dependant. I do not see why it should be protected in one transaction and not in another.
I will consult with the officials and return to the Deputy on this matter because, frankly, I am confused. One seems to be at odds with the other.
To return to the other points, what is there under this Bill to stop someone who is heretofore charging 1,000 per cent interest on moneylending transactions converting them to 1,000 per cent interest loans secured on the house and then claiming that under section 46 the Director of Consumer Affairs cannot touch them because by that definition they are engaged in a housing loan?
Is that to say if a licensed moneylender decided he or she would become a mortgage seller?
If he inserts a clause in the agreement stating that "the lender hereby agrees that the sums due under this contract are secured on the house".
That is something which I will have to discuss with the officials and return to the Deputy on because we did not anticipate that. Returning to the Deputy's main point which was——
That was the main point, although perhaps I did not make it very adequately.
It did not seem very clear when the Deputy put it forward, if I may say so. The purpose of what the Deputy put forward was that the person who buys a block of flats and engages——
I was making two separate points.
The Deputy has betrayed the worries he has about his amendments on the basis that they may be too restrictive on genuine consumers who would find themsleves in a situation where they would have to seek another consumer credit purchase of a mortgage. In the interests of that, I am asking him to consider reviewing his amendments.
I am quite happy to withdraw the amendments and look at this again on Report Stage. However, I ask the Minister to look at the possibility that unscrupulous moneylenders could use the security on the house as an escape hatch and evade the purposes of the Bill. I ask her to come back on this on Report Stage.
I thank Deputy Bruton for withdrawing the amendment and I agree to discuss this matter in greater detail on Report Stage.
Amendment, by leave, withdrawn.
Is amendment No. 16, in the name of Deputy Richard Bruton, withdrawn?
I accept the Minister's explanation that "natural person" covers that issue.
Amendment No. 16 not moved.
Amendment No. 18 is related to amendment No. 17 and amendment No. 19 is an alternative to amendment No. 18. Therefore we will take amendments Nos. 17, 18 and 19 together. Is that agreed? Agreed.
I move amendment No. 17:
In page 11, subsection (1), to delete lines 7 and 8 and substitute the following:
"(b) a society which is registered as a credit union uder the Industrial and Provident Societies Acts, 1893 to 1978, by virtue of the Credit Union Act, 1966,".
Amendment No. 18 reads:
In page 11, subsection (1), to delete lines 11 to 17 and substitute the following:
"(d) a credit institution,
(e) a person who supplies money for the purchase, sale or hire of goods at an APR which is less than 23 per cent (or such other rate as may be prescribed),".
The inclusion of the words "credit institution" follows on from previous amendments which we have agreed. The addition of a new paragraph (e) will continue the existing exemption from the Moneylenders Act, 1960, by virtue of S.I. No. 167 in 1993, about lending at an APR which is less than 23 per cent. The statutory instrument defined a rate of interest at less than 17 per cent.
The effect of this amendment is to exempt certain bona fides finance houses from the requirement of seeking an exemption under section 95. The exemptions in paragraphs (f) and (g) for mortgage lenders and mortgage intermediaries followed consultations with the Department of the Evironment.
I have been studying this definition of moneylenders and I ask the Minister to follow this mental exercise with me. A person may ask if he is a moneylender within the meaning of the Act. The Bill states that:
"moneylender" means a person who carries on the business of moneylending, or who advertises or announces himself or holds himself out in any way as carrying on that business;
There are a number of exclusions from that definition.
That is correct.
The person then asks if he carries on the business of moneylending because if he does he is a moneylender. The definition of moneylending in the Bill states that it is "credit supplied by a moneylender . . . on foot of a moneylending agreement". However, this does not answer the perosn's question and he is still wondering whether or not he is a moneylender. He then looks at "moneylending agreement", which is an agreement between a moneylender and somebody else. Therefore, it is an entirely circular definition which is most unsatisfactory. Is the person who is part of this transaction a moneylender?
The definitions as one reads through the Bill are circular because if one is not a moneylender, it is not a moneylending agreement. If it is not a moneylending agreement, one is not carrying on the business of moneylending. I have a grave worry that it is a circular definition. If on some occasion a court has to decide whether someone is a moneylender, the question is effectively one of definition. However, the definitions do not assist one in the matter.
Is the Minister leaving in paragraphs (f) and (g) for mortgage lenders?
This is correct.
It means that a person who carries on and whose business includes the making of housing loans is not a moneylender. Is the Minister happy with that? What would happen if I lend money in an office in O'Connell Street every day——
As defined.
——at 40 per cent per annum or some terrible rate like that?
We will be coming to those things later.
If that was my main activity and I also had a notice in writing stating that I will also give a mortgage to buy a house, am I not then excluded from the definition of "moneylender" by virtue of paragraph (g)?
That scenario was put to us and I have reflected on it. There are licensed and unlicensed moneylenders. Many groups who discussed this issue with me mentioned the word "moneylending" and had an aversion or non-aversion to the use of the title, depending on their particular outlook. One of the difficulties with the moneylending business is that people have not always spoken about it clearly enough.
There are legal and illegal moneylenders. We have tried to pinpoint that which is a legitimate exercise and the prohibitions attendant on that, which we will discuss presently, will clarify that matter. However the non-announcement of the difference between legal and illegal has meant that everybody says——
All moneylenders are bad.
That is the beginning of the difficulties people have about the title "moneylender" being put upon them when they go to discuss a matter. If an English teacher was defining "moneylender", any person giving money would be a moneylender. Historically, however, moneylenders——
They have a specific meaning.
In the 1900 Act and the——
1933 Act.
——we kept with that the historic term "moneylender" and that the place from which we have taken the term. However, we have put forward amendment No. 191 which states:
"In page 44, line 31, after "agreement" to insert "or to any transaction which, whatever its form may be, is substantially one of moneylending".
I understand Deputy McDowell's point. The historic usage of the word "moneylending" has particular connotations. Unfortunately there are not many people who talk clearly about licensed and unlicensed moneylending. It is the scourge of illegal moneylending — we will be addressing this at length as we go through the Bill — which is causing the headaches, heartaches and awful situations in which people find themselves. I ask Deputy McDowell and other members to look at amendment No. 191.
I may not be explaining myself clearly. As I understand it, the term "moneylender" when used in the Act is one which excludes a mortgage lender.
That is correct.
A person may appear before a judge who has to ascertain if he is a mortgage lender. If the person can establish to the judge's satisfaction that his business includes the giving of housing loans, he becomes a mortgage lender under the definition in the Bill?
That is right.
In other words, if 95 per cent of my business is lending money in the traditional fashion of a moneylender and 5 per cent or even 1 per cent of my business is giving people mortgages to buy houses, I can say that I am not a moneylender under this Act. This is what concerns me.
We examined this provision in detail with many of the groups that came in. I raised that point with the officials, what is to stop a person whose——
Substantially a moneylender.
——whose main business was money lending, although it would be of a legal nature? We proposed amendment No. 191 to represent that position or to effectively transpose the position the Deputy outlined," . . . any transaction which, whatever its form may be, is substantially one of moneylending".
I would give the Minister of State marks for effort. However, the problem is if one goes back to the definition at the start to find out if it is money lending, one is stuck. A money lending agreement is only one where a moneylender is involved. If somebody came to me and said they wanted to avoid all the provisions of Part VIII of the Bill, I would tell them that they would be well advised to advertise housing loans on their brochures so that when the Director of Consumer Affairs arrives on their premises, they can say, "Excuse me, but you have no jurisdiction over me". I do not have to have a licence.
Imagine a position where there is a mythical person who is a moneylender for 98 per cent of his time. He then decides, for the insubstantial part of his time, to engage in the provision of housing loans. That is what the Deputy is talking about, is it not?
Yes.
The person engages in wanton rates of interest. The purpose of the remit of the Director of Consumer Affairs, when he arrives on this person's doorstep to see what activities he is engaged in, hopefully following a complaint from the consumer, is to say, "Your main business is money lending".
That is not there. There is nothing about main business here.
I refer the Deputy to amendment No. 191 and the word "substantially".
I am looking at amendment No. 191 and it says that it affects an agreement which is a money lending agreement or ——
If one makes even one money lending agreement, one needs a licence.
Yes, but if one goes back to find out what is substantially one of money lending——
We are now into definition.
Suppose I am a mortgage provider for 95 per cent of my time and I give a loan to Deputy Bruton. Do I need a moneylender's licence because it is substantially a money lending agreement, even though 99 per cent of my business is in the mortgage area?
One is now a mortgage lender. Previously one was a moneylender and now one is a mortgage lender.
I ask the Minister of State to look at the other situation. Is it the case that because on this occasion I am engaging in what is substantially a money lending transaction, I now need a moneylender's licence?
If one is a provider of mortgage credit for 95 per cent of the time and one decides to enter the arena of money lending, one must obtain a licence to be a moneylender. One cannot be a moneylender without having a moneylender's licence. The licence carries a substantial fee. It is under the direct scrutiny of the Director of Consumer Affairs and is subject to annual review and an annual enactment of such a fee.
That is interesting. The Minister of State is saying that any mortgage lender who, on a one-off basis as part of his business, makes a loan to a person——
If a person engages in the process of money lending, as distinct from the provision of credit for a housing mortgage, that person is then a moneylender and must have a licence. That is my understanding of the Bill. The completion of such an arrangement or the entering into such an agreement to loan money would require one to seek a moneylender's licence.
I am not trying to be difficult.
The Deputy is making a fair attempt.
We have to get this right.
Yes, of course, we do.
Section 80 states: "This Part shall apply where a credit agreement is a moneylending agreement". It is proposed to amend "where a credit agreement is a moneylending agreement" with "or to any transaction which, whatever its form may be, is substantially one of moneylending".
Deputy McDowell is correct. The Bill states that a person shall not engage in the business of money lending without a licence.
Money lending means credit supply by a moneylender to a consumer.
The definition of moneylender——
One goes back to the moneylender and one finds that he is not a moneylender.
That is correct.
In view of the stalemate that has been reached, perhaps it would be possible for the Minister of State to have further discussion with her officials and come back on Report Stage. It seems that there is a difference of opinion.
We should all be very sure of one thing, although I am subject to what the Chair says and it is a good idea, if one engages in money lending, one must have a licence even if one engages in one money lending operation or 1,000.
That is not the case because the section states——
Section 82.
——that a person shall not engage in the business of money lending without a moneylender's licence. However, if one refers to details of the business of money lending, it says someone supplied by a moneylender. If one has established that one is not a moneylender, one is away with it.
Let us go back to that point. Deputy McDowell started there, because he referred to the circular movement of what is a moneylender. A moneylender is a person who loans money to a person who has made an application for money.
However, it is not a mortgage lender.
It is not a mortgage lender.
Therefore, a person who loans money and whose business also includes the making of housing loans is, according to page 11, excluded from the definition of a moneylender.
No. If one looks at amendment No. 191, "or to any transaction which, whatever its form may be, is substantially . . ."
The Minister of State has great faith in that amendment. However, with regard to section 82, I would walk my client out of the District Court if I said, "Do you lend money to people?"
We are very lucky the Deputy is here instead of Deputy Quill. The Deputy is certainly giving us the benefit. I wonder if mills exist so that legal people will have work. It seems to me that it is not the way we want them to be.
It is a very circular definition. If anybody can avail of any of the exception of categories, they can walk out of any liability under Part VIII.
We are having the type of debate that I wanted to have. The Chairman is conducting it with admirable aplomb.
Thank you, Minister.
The Chairman does not know whether to thank me for that provision. Genuinely, the points are relevant. In the course of the 45 meetings — I am massively educated about the whole matter — the case of a person stating that he is a moneylender and telling someone who wants a mortgage that he can provide it was put to us. The Deputy put the vice versa case, if one was a mortgage lender and by virtue of one act or one experience, one becomes a moneylender. I recall when meeting a group in my office it suddenly struck me that this could be done. How would one get out of it or how would we ensure that a person could not get out of it? It seems months ago but that is why we made a decision and drafted amendment No. 191. I had forgotten. We went back to the Moneylenders Act, 1990, to get the wording, which is a historic term, of that amendment. The wording is drawn directly from the 1900 Act. One might say that it is 94 years ago and where we are now?
If it works, it works.
If it works, it works. It is drawn from that Act and has survived numerous sorties by the legal profession to undefine it or to so use it.
If the Minister is happy, that is fine. However, I have done my best.
As amendment No. 191 has been mentioned, who interprets what the word "substantially" actually means?
We cannot go into the meaning of every word. That goes to the Director of Consumer Affairs, who makes his or her judgment. It then goes to the judge of the day if it is challenged in a court. The word "substantially" is used in various legal clauses in Bills. I have come across it several times.
To me that sounds a little bit "iffy" if I can describe it in that way. "Substantial" could be 20 per cent, 10 per cent of 70 per cent. I do not know what the definition of "substantial" is in percentage terms.
It is in an Act relating to money lending because of that and because, as Deputy McDowell says, it has survived that length of time and is used in other legal terminology. I see the Deputy's point. I wanted to know what percentage "substantially" was as well until I went back and checked the word out.
Listening to the complete scenario I am persuaded by Deputy McDowell's argument rather than the Minister's.
But he is not persuaded by me.
He is saying, "Be it on your own head".
That is right.
No. 191 refers to a money lending agreement but the point Deputy McDowell is making is that the definition of the moneylender is the escape clause. It does not matter how you change particular definitions of money lending agreements, he can have 100 per cent pure money lending agreements and if he can call himself a mortgage lender—
No. 191 will not help because money lending wherever it appears, even if it is in No. 191 is substantially one of moneylending. The court asks, "What do the words money lending mean?", and it goes back to line 22 on page 11 and it says: "It is credit supplied by a moneylender". They ask if this person is a moneylender and the answer is "No" because he is also offering mortgages and that is the end of the matter. The case stops.
The Deputy is going back to the start of his argument. Historically, the term "moneylender"is one that has been used. It is used in other legislation.
I know that. I appreciate that.
Therefore it seemed correct and apt that it would be the one retained. What the Deputy is seeking to breakdown — which is what was put to me and came into my own mind — is how do you define what is a legal moneylender as well as people who offer credit in other forms. We came down to the point of view that the title "moneylender"— and we go on later in the Bill to define "legal" and "illegal"— was as explicit a term as could be produced. Questions have arisen vis-�-vis the 1900 Act and the 1930 Act because there is now such a wide range of sophisticated credit providers of all sorts which were unknown in the days when the term “moneylender” was coined. I take it that the question needs to be further addressed and that we would return to the subject. We have recourse to no higher a legal authority than the Attorney General, as Deputy McDowell will be aware. I would certainly be prepared to seek his advice again on this matter.
Would it be got over by saying, after the list of exemptions, something to the effect that, "Where these are not offering moneylending agreements", so that if a mortgage lender is engaged in money lending he is in? However, that might be too wide because everyone might end up having to have a moneylender's licence as well as a banking licence.
Apply to the court and become a moneylender.
Once they went over 23 per cent, as on their Visa cards, they would have to have their moneylender's licence.
I am fairly convinced that if somebody tried to reply on the argument I have just made and said they were not breaching section 82 — which is the prohibition — because the words money lending there can only mean what it means on page 11, which is credit supplied by a moneylender, the person would claim they are not a moneylender because——
Because they are selling a mortgage.
——because part of their business is mortgage loans.
Yes, but at the same time if that person engages in one money lending transaction he or she is a moneylender.
No.
But they are.
In (g) he is excluded from the definition of a moneylender, therefore the terms "moneylending agreement" and "money lending" do not apply to him.
Can we take your advice on that, Chairperson?
May I take it that the amendment is not being moved, on the understanding that the Minister will return to it on Report Stage?
Why did the Minister feel it necessary to put in (g) at all?
In other words, to exclude a mortgage lender?
Yes, since you have building societies.
Who else are you dealing with if it is not a building society or a credit institution?
Deputy Flood is asking me why we should put in (g).
Yes, because that is what causes all the problems for Deputy McDowell.
I have suddenly realised a way around it which perhaps the Attorney General and the Minister of State might consider. If you put after (g) and (g) the term "a mortgage intermediary acting as such or mortgage lender acting as such" you would exclude a mortgage lender who was not acting as a mortgage lender, that is somebody who was just acting in a dual role.
We will certainly consider it. Deputy Flood asked "Why have (g) at all?
Yes, on the basis that building societies, registered societies and banks are already included.
It is just an explanation.
But if you took that out would it not ease the situation with regard to the definition of moneylender?
What about a mortgage intermediary?
They can be moneylenders.
No, I would certainly not be disposed to that.
Well then use the term "acting as such".
That would broaden it too much altogether and would make the situation far worse. It would bring far more people than moneylenders into the net. We will certainly consider subsection (f).
Amendment agreed to.
I move amendment No. 18:
In page 11, subsection (1), to delete lines 11 to 17 and substitute the following:
"(d) a credit institution,
(e) a person who supplies money for the purchase, sale or hire of goods at an APR which is less than 23 percent (or such other rates as may be prescribed),".
If amendment No. 18 is accepted, and we have agreement on that, amendment No. 19 cannot be moved.
I would say that Deputy Quill caught the point I am making, that we should put down the word "person" in line 24 which was aimed at——
To delete "moneylender" and substitute "person".
Amendment agreed to.
Amendment No. 19 not moved.
I move amendment No. 20:
In page 11, subsection (1), line 24, to delete "moneylender" and substitute "person".
The Minister has agreed to review this. There is no point in going back to it again but there are circular definitions there.
Amendment, by leave, withdrawn.
I move amendment No. 21:
In page 11, subsection (1), lines 24 to 41, to delete all words from and including "in" in line 24 down to and including "prescribe" in line 41.
I want to ask the Minister about this definition about doing your business away from your business premises. There are two tests, that and the 23 per cent trigger, as to what is a money lending agreement. I know it is either/or, so once a moneylender is charging over 23 per cent he is a moneylender at his own premises. I was surprised that the whole thing hinged on operating away from your own premises. What is the reason for the whole definition of moneylending?
What is the Deputy's point again?
According to this, the whole definition of a money lending agreement hinges on the APR or otherwise on doing your business away from your business premises. I wonder why is that such an enormous——
Why are door to door salesman in this?
What exactly does the Deputy mean? One is the rate of interest.
I am quite happy with that. It is sufficient. Anything over an APR of 23 per cent is fine. However, why is the Minister talking about other matters such as how one conducts one's business? The Minister is saying that somebody who offers credit at less than 23 per cent outside his business premises is a moneylender.
The moneylender's general practice is to call to one's door. In some instances moneylending in the main cities is done through an office or business premises but the general practice is to call to one's door. Hence there are the arrangements which we have to make later. Sometimes there is a weekly collection, sometimes it is fortnightly. The form of credit is attractive to consumers who are not otherwise good payers. We may cavil at that or we may not but that is an element of it.
People build up a relationship with the licensed moneylender or with his agent. The objective is to ensure that a bona fide finance agreement, signed in a business premises, is not characterised as a money lending agreement. When we discuss the abuses of money lending we mean the hours of calling, the books, the definition, the writing out of the agreement, the lack of harrassment and everything that is connected with doing business at one's home.
If one is offering credit at less than 23 per cent, does it matter where one does it?
I echo Deputy Bruton. I am sorry to be obstructive.
It is not being obstructive, it is constructive.
In the context of the definition of (d), if I run a cash office on St. Stephen's Green lending money at 22 per cent am I money lending?
You are a moneylender. You need a moneylender's licence if you are operating through an office.
If I have an office on Stephen's Green and I offer money at 22 per cent APR people will come to me. If I give a cash loan——
You are not a moneylender if you are under the——
If I loan cash from an office in Stephen's Green, I am neither a banker nor a moneylender. I can loan such money as long as I keep it beneath 23 per cent APR?
It has been suggested to me that you are, in that case, a finance house.
When did I become a finance house?
The Deputies will recall that I started this discussion by saying that this is just a beginning. This subject was like the Chinese box when I started to work on this legislation. Consumers are only beginning the process of finding out about their rights, their obligations and their consumer protection laws. This Bill is a step in that direction and today's debate is an expression of that. There is a clear need for many other financial consumer protection laws.
I want to be absolutely clear about this. I can open an office called Michael McDowell Credit Limited on St. Stephen's Green and loan money to anybody as long as the rate is under 23 per cent APR?
Yes, as long as you are under the requirement.
I can lend money to whoever I like, visit their houses and so forth?
This Bill is the Consumer Credit Bill. As a result of my meetings and consultations about this, I have come to the conclusion that there are many financial dealings, regulations and institutions which require the regulatory environment which is available, for example, in the UK. We were over-regulated and I am trying to find the middle ground. This is only the beginning of that process.
Amendment, by leave, withdrawn.
Sitting suspended at 3.45 p.m. and resumed at 4.25 p.m.
I move amendment No. 22:
In page 11, subsection (1), to delete line 38 and substitute the following:
"(d) where the total cost of credit to the consumer under the agreement,".
The purpose of this is clear.
The Minister is just adding the words "under the agreement". She is leaving out everything about the APR.
It is just adding "where the total cost of credit to the consumer under the agreement". It is to correct bad English.
Is it simply technical and the Minister is not changing anything else?
That is so. Where the word "agreement" occurs, the line is being changed to "where the total cost of credit to the consumer under the agreement". It is purely textual.
Amendment agreed to.
I move amendment No. 23:
In page (11), subsection (1), between lines 41 and 42, to include the following definition:
"‘mortgage' includes charge;".
This is purely technical. The suggestion came from the Department of the Environment. The definition is used extensively in the Housing Acts. It was at the Department's request that this was included.
What does it mean?
My officials inform me this definition is inherent in every Housing Act and housing regulation and no further explanation is needed.
Amendment agreed to.
I move amendment No. 24:
In page 11, subsection (1), line 42, to delete "includes" and substitute "is".
Does this deal with the issue we discussed some time ago? the word does not imply that it is exclusive. I do not know what the change is.
The change will narrow the chance, but it has a bearing on what we were discussing before the suspension of business. The Attorney General's opinion was that the word "is", rather than "includes", was the correct word. We are including this at his behest.
I suspect that the word "is" does not mean he cannot do other things as well. Deputy McDowell's case still needs to be looked at.
That is true and that is why I did not introduce this earlier because I am not convinced it would exclude the scenario painted by him.
Amendment agreed to.
I move amendment No. 25:
In page 11, subsection (1), between lines 43 and 44, to insert the following definition:
"‘mortgage intermediary' means any person, other than a mortgage lender or credit institution, who in return for a commission, payment or consideration of any kind in relation to the credit transaction, arranges or purports to arrange the provision of a housing loan by a mortgage lender;".
There are several reasons for this amendment, but two are important. The first is to substitute the new definition of "credit institution", which we had for the longer list of exempted institutions, and the second is to add the words, "who in return for a commission, payment or consideration of any kind in relation to the credit transaction", in order to exclude from the provisions of the Bill mortgage intermediate professionals acting for their clients, such as solicitors and accountants. We discussed this matter this morning. It further carries through an earlier provision we made.
Amendment agreed to.
I move amendment No. 26:
In page 12, lines 30 to 33, to delete subsection (3).
This was included following consultations with the Attorney General's Office. The provision was included to define for legal purposes the date of posting and, by reference thereto, to define the time limits for action in relation to the provisions, such as the cooling off period, etc. However, legal advice was accepted that the postmark is not always sufficient evidence of posting and, therefore, this subsection will be withdrawn.
What has been substituted? When one must serve so many days notice on the consumer and there are not fewer than so many days, what will now define the starting and finishing periods?
The provision in this amendment was included to define, for legal purposes, the date of posting and, by reference thereto, to define the time limits for action in relation to the provisions, such as the cooling off period, etc. The provision in ths Bill states:
In this Act where anything is sent or received by pre-paid ordinary post it shall be deemed to have been sent or received, as the case may be, on the date of the postmark as stamped by An Post or any other postal authority.
However, we decided this was not precise enough because the postmark is not always sufficient evidence of posting, therefore, this subsection will be withdrawn. We are including the words, "a consumer may determine a credit agreement within ten days"— that is the cooling off period to which we referred —"of receiving it or a copy thereof by giving written notice to this effect to the creditor or owner, as the case may be."
Does this mean that all notices must be physically served on the person, rather than posted to them?
No, the provision was included to define, for legal purposes, the date of posting. This is the proof needed to determine when it was sent. It was also included to define the time limits for action in relation to the provisions.
If posting is no longer acceptable, what, will the new proof be?
Registered post, which is discussed in another section. The date of posting is clearly marked on registered post.
A consumer has 21 days to respond to these transactions.
The consumer has so many days.
However, the consumer must take out registered post to respond to——
That concerns both sides of the transaction.
People would need to be well informed about this matter.
They would.
Amendment agreed to.
Question proposed: "That section 2, as amended, stand part of the Bill."
The question of contracts of guarantee was raised by some of the banking houses.
Which section is that in?
It is on page 9, line 30, of section 2. The banking people said it was defined only to include guarantees made at the request of the consumer. In certain instances a lender might sanction a facility subject to the provision of a guarantee by a suitable guarantor. In order to cater for this situation, the banking people recommend the inclusion of the words, "made at the request expressed or implied by the consumer".
These people also brought that to my attention, but I was not disposed to it.
What is the provision? Must the consumer specify a guarantor?
Yes. I remember the discussion on this issue, but we did not see fit to include their recommendation.
Question put and agreed to.
NEW SECTION.
I move amendment No. 27:
In page 13, before section 3, to insert the following new section:
"3.—It shall be an offence to discriminate on grounds of sex, sexual orientation, belief, membership of any legal organisation, economic status, social status or area of residence in the offering, negotiating or granting of a credit agreement.".
I thought this provision would be of help in the Bill. It is my understanding that women have been, and still are, the victims of discrimination in relation to offers of credit agreements. There is a suspicion that areas of residence or social status may be a problem in relation to securing a credit agreement. Everyone accepts that financial criteria and prudence must be observed by onyone offering credit, but the Bill might benefit from a general provision whereby discrimination would not be permitted on any grounds which did not concern the transaction involved. I do not claim that my amendment, as drafted, cannot be improved by the Minister, but perhaps she will tell me if it would be a useful addition to the Bill.
I thought about tabling a similar amendment to this section because we received many submissions which also argued in favour of it. However, if the Bill had taken its normal course, they would have been enacted. Interested organisations should be given an opportunity to make their input. I did not table the amendment for the following reason. I agree with the first part of Deputy Bruton's amendment in so far as it relates to outlawing discrimination on grounds of sex, sexual orientation, belief, membership of any legal organisation and so on. There has been evidence on occasion of discrimination against women. The amendment also refers to economic status. The reason I did not proceed with a similar amendment was because of the words "economic status". I got advice to the effect that one can sometimes do more harm than good by dispensing credit to somebody whose economic status, after reasonable assessment, shows that that person would be better if they did not get credit in the first instance. If credit was available irrespective of economic status or assessment, it would only induce somebody further into the arms of unofficial or illegal moneylenders.
In my constituency, in order to pay off an original debt, some people resort to unofficial or illegal moneylenders to get money to pay off that debt, when any reasonable care would have shown that was not the way to deal with that particular problem. There is a lot of merit in Deputy R. Bruton's amendment, but I am concerned about that aspect of it. I got advice from people dealing with this and they have some reservations about that aspect.
For the purposes of clarity, we should go through this amendment. I agree that this is essentially a matter for equality legislation. There is merit in what Deputy R. Bruton is putting forward. In line with what Deputy Rabbitte said, we may delete part of it. The amendment states: "It shall be an offence to discriminate on grounds of sex". I agree with that. During the course of constituency work, when speaking to women's organisations and people who put views forward, one finds this is not openly done. There seems to be more hidden barriers for women getting loans as opposed to men. I am not saying financial or credit institutions do this deliberately. For example, when men and women or married or single people go for interviews there is open discrimination. Often it is beneath the surface. Although banks say they do not discriminate and that if one makes a business application, it is viewed on the way one drafts one's proposal and how businesslike one is, there is a disconcerting attempt to say: "What does your husband do and what back-up do you have? There is deep seated discrimination on grounds of sex. I agree with the inclusion of sexual orientation because I included that in the Unfair Dismissals (Amendment) Acts 1993, and I was glad to do so. One's belief should not come into it. Could I ask Deputy Bruton what he means by membership of any legal organisation?
A person looking for a loan should not be discriminated against if the institution offering the loan is able to recover it and the person is able to meet the repayments. A financial institution should not have the right to decide that members of certain trade unions are not deemed to be suitable persons. Discrimination should only be based on the credit agreement and a person's ability to deliver. I am open to the Minister amending the list so that it may be more specific. I accept what Deputy Rabbitte said that economic status may be open to various interpretations and that it may be too loose a term to use.
I have difficulty with "membership of any legal organisation" because it is a very broad term. It does not fit in neatly. I also have difficulty with the words "economic status". According to official advice and when dealing with constituency matters — this is where many of us gain experience in these matters — one finds that people take on loan commitments which they cannot manage or are ever likely to manage. It is wrong to advise such people to go into further debt or to try to take on a burden which they cannot afford. The words "economic status" are inappropriate.
I agree with the words "social status" or "area of residence" because they may be used. Last Saturday I spoke to a woman who wanted to borrow money from a financial institution. She had a credible way of repaying the modest amount of money she wanted to borrow and she was prepared to give a guarantee. Because she lived in a certain area she was not granted the loan. I believe these words are appropriate. "Social status" and "area of residence" are the same if one's social status is determined by where one comes from. I accept Deputy R. Bruton's amendment with regard to sex, sexual orientation, belief and area of residence.
We need clarification.
It is proposed to delete all words from "membership" to "economic status".
Amendment, agreed to.