Amendments Nos. 28 and 45 are related and may be discussed together. Is that agreed? Agreed.
SECTION 3.
I move amendment No. 28:
In page 13, subsection (1), line 7, after "agreements" to insert "and consumer hire agreements".
This amendment has come to us via the Director of Consumer Affairs, who took an interest in the Bill. The purpose of it is to ensure that the provisions of Part VIII in relation to consumer hire agreements are encompassed in the application of the Bill. It could be argued that a consumer hire agreement is not a credit agreement, albeit to the consumer there is no difference. It ensures that consumer hire agreements are not excluded at some future date by a court interpretation as we discussed earlier.
Amendment No. 45 states:
In page 14, subsection (1), lines 6 and 7, after "agreements" to insert "and consumer hire agreements".
The purpose of this amendment is to allow the Director of Consumer Affairs to give advice to consumers regarding consumer hire agreements. While the Director can already use his powers under other legislation, it is considered important in the context of this section and for clarity that the text be amended as proposed. The Director will implement the Bill and we should take note of the points which he has brought forward. The Director and his Office were of the opinion that these amendments were necessary for the protection of consumers and for clarification to consumers.
That answers the query I raised this morning. It allows the Director of Consumer Affairs to look at lease agreements as well as hire agreements.
It allows the Director of Consumer Affairs enter into discussion, surveyance and advice on such matters.
I appreciate that clarification. It is very important.
Many aspects of the Bill are interwoven with other Bills. It is often difficult to make the connection.
Amendment agreed to.
I move amendment No. 29:
In page 13, subsection (2) (a), to delete lines 11 and 12, and substitute the following:
"(i) a society which is registered as a credit union under the Industrial and Provident Societies Act, 1893 to 1978, by virtue of the Credit Union Act, 1966,".
The extended definition of "credit union" now proposed is legally correct. What I said this morning still holds. Legislation dealing with the credit unions will be brought forward this year. The heads of Bills are defined.
We have been in receipt of conflicting advice and representations on this issue. We have had some very strong representations that credit unions ought to be taken within the ambit of the Bill. There seems to be very logical and reasonable arguments why that should be the case. Credit unions are in the normal course of events involved in regular interaction, in some cases almost by definition, with low income families. It would be sensible if they were brought within the ambit of the Act.
We have also had representations to say that they ought not be taken within the ambit of the Bill. You could argue that those representations have a vested interest — it may be unfair to say this when speaking about credit unions — but it is a partisan pleading that they ought not be included in the Bill. On balance I would have preferred to have seen them included. The Minister is promising reasonably imminent legislation to deal with the credit union situation itself.
It is within the remit of our Department but my colleague, the Minister for Enterprise and Employment, Deputy Quinn, will be bringing this through. Like all the Deputies, we have received conflicting advice. One of the interesting things in relation to this Bill is that it turned out correct that there was a gap. It was an educative exercise for all of us. It was developmental and everybody got their say, which is the precise purpose of legislation. It was put to me that credit unions should be included and not included in this legislation. Credit unions have always been exempt from EU banking directives and have never been classed as credit institutions under any EU directives, regulations or legislation. Under section 28 of the Credit Union Act, 1966, the old Moneylenders Act does not apply to credit unions.
Credit unions give credit to consumers, but they are mutual non-profit making organisations which are operated to a large degree on a voluntary basis. They are member based organisations and operate in accordance with the unique philosophy of self-help. Credit unions do not provide services to the general public. One must be a member of a credit union in order to obtain credit through a credit union. They grant loans to their members, who must have a particular common bond of association or occupation. The concept of mutuality is very important, as is the concept of the common bond. They are financial cooperatives, managed, owned and controlled by their members. They may employ people within their offices to do the management administrative work. This is in total contrast to other financial institutions. There are 10,000 volunteers in the running of the credit unions. The principal activity is providing savings and loan services to their members.
The average loan given by a credit union is £1,000 and the loan duration is 16 months. The whole ethos of a credit union is truth in lending and truth in savings. We would all wish credit institutions operated clarity and truth in lending. I am sure I will be hauled over the coals for that comment. Twenty years ago a similar Bill to this was called in the United States the Truth in Lending Bill. When I was on radio a kind person sent me a copy of that Bill. Members are kept fully aware at all times of the activities of the credit union and any matters affecting their savings. I am making the point that credit unions are not profit making institutions. They are admirable institutions.
From a conversation I had with a member of a credit union I was informed that they often pick up the pieces of unfortunate brushes with illegal moneylenders. That is the reason we came down on the side of non-inclusion, bearing in mind that legislation dealing with credit unions is being developed and the fact that 1994 is the anniversary year of credit unions. In the Consumer Credit Bill we are following through an EU directive which never included credit unions.
There is a good deal of valid opinion on both sides of the argument here. On balance I come down on the side of excluding the credit unions this time. It is a fact that they work mainly with voluntary workers. They are a member based, non-profit making organisation. It is a well known fact that the credit unions have helped enormously and assisted people, who have been taken out of the clutches of illegal moneylenders, put on the road of proper credit and given control over their own credit agreements. They fulfil a number of very essential and constructive roles in the community.
There is a proposal to extend the role of credit unions and give them new powers. That is only at the level of being promised by a Minister at present. We may have to reconsider this matter again if the credit unions are given extended powers and brought more into line with the kind of credit institutions which come within the ambit of this Bill. We may have to come back to it again. As they currently stand, I favour excluding them from this Bill.
We are all agreed that the credit unions over the years have performed an enormously helpful task to their own specific local communities. The credit union, as a business, has come a long way from the original service which it provided. I was surprised to hear the figures given by the Minister, quoting that the average loan is £1,000. I accept that, but I understand that individual loans can be very much higher than that. I recall cases of loans of £4,000, £5,000 or £6,000 to individual borrowers. That is a very substantial loan.
We have two cases put by the credit unions themselves. The Irish League of Credit Unions have written to us and so also have the Irish Bankers Federation setting out the various points, but touching briefly on the question of the credit union. I wonder why the Irish League of Credit Unions are very keen to remain outside the scope of this Bill, bearing in mind that it is a Consumers Protection Bill. The credit union movement has advanced a great deal in the last ten to 20 years an I wonder why they wish to stay outside the scope of the Bill. They have set out various reasons. Many credit unions are now developing their own premises, and rightly so, because they want to give a good service to their members.
The membership of credit unions in urban areas can amount to many thousands. It is quite a substantial business and the amount of individual loans can be quite high. Some of them are used for buying houses and although they may not be as high as a mortgage a good portion of a person's borrowing would be for the purchase of a house or to assist in the purchase of a house.
On balance, I accept the case put forward by the Irish League of Credit Unions. I would be interested in the contents of the forthcoming Credit Union Bill. As Deputy Quill said, it may impinge on this legislation and I presume it will take account of this Bill. I prefer those organisations being involved in legislation rather than wanting to stay outside it.
I am happy to see credit unions remain outside at present. The most telling argument — which has not been mentioned — is that the provisions of the Credit Union Act are onerous and pro-consumer compared with this Bill. Every application for a loan has to be in writing; there are prohibitions on disclosure and the rates of interest are limited by law to 1 per cent per month. If some of the other financial institutions were offering the package available in the credit unions the consumer, by and large, would be much happier. Under section 35 of the Credit Union Act, 1966, the Minister has the power to make regulations regarding the type of credit and has many other broad powers.
Existing legislation which is particularly geared to the nature of the credit union is satisfactory and is quite amenable to amendment by way of regulation to meet any issues that need attention in relation to protection of the consumer. I have never heard complaints from consumers about the way in which they were treated by credit unions; by and large their record is good. On the basis of the "if it is not broken do not fix it" principle, we should stick with the Credit Union Act, wait and see what the Minister is proposing in regard to wider activities for the credit unions — which are long overdue — and come back to the issue at that stage.
Amendment agreed to.
I move amendment No. 30:
In page 13, subsection (2) (a), to delete lines 13 and 14.
I would be interested to hear the Minister's view on this amendment.
This amendment is to delete lines 13 and 14, and include credit unions. Following what the Deputy said, I strayed into this issue myself because one of the more precise definitions we gave lent itself to what was said. At the expense of repeating myself, the first point relates to the EU legislation regulations——
Is this not to do with friendly societies?
I thought we were talking about the credit unions.
No, I thought the Minister said that it just led into it. This concerns subsection (2) (a) (ii).
I thought we were still dealing with the credit unions.
As I said, we have received conflicting representations on that and it is a fairly finely balanced judgment. I take Deputy Bruton's point that one has not received complaints about credit unions in the manner one has from people who are getting consumer credit from other sources. My general view is along the lines of that articulated by Deputy Flood, that I would rather see the legislation being inclusive whereby people were willing to come into it. It would not impose any additional obligations on the credit unions. They have made a detailed submission and if we are considering separate legislation on it so much the better. My one regret is that credit unions are, by and large, more often a phenomenon of older settled communities than of some of the newer communities — in Dublin at least — but that is a separate issue.
It is true that they are found in older council estates where they are well established and well run and people have faith and trust in them. This amendment relates to the provident societies and other such groupings.
Why should they be excluded?
They are still based on the theme of mutuality, non profit and ownership by the members with loans only being given to members. As I understand it, the same provisions apply to the other types of societies the Deputy mentioned — that is why I kept talking about the credit unions. The provisions of ownership management, mutuality and truth in lending which prevail for the credit unions prevail in the main for the other groups the Deputy mentions — the provident and friendly societies. These are also governed by legislation and regulation.
Is it not true to say that there was a serious problem with one society?
Yes, with one friendly society. I brought in a regulation when I had responsibility for trade and marketing. The Registrar of Friendly Societies is attending to that. There was a difficulty there.
Is it such societies that are covered by this exclusion?
Yes, there was a particular difficulty with one friendly society. Some of us would have come across it. I know of it is because I put through a regulation for the then Minister, Deputy O'Malley, early in 1992 and I know about the case from the background information. In general, I am saying that those societies — provident or friendly or whatever they may call themselves — are all governed by the same conditions as govern the credit unions — ownership, mutuality and non-profit making. The particular instance of which we speak was a "scandal".
Deputy Flood's point was the one that prompted this amendment. Why should the conditions of ownership and mutuality, etc., be sufficient reason for exclusion? With regard to the transactions that take place between members of the public and these friendly societies, it is no less important or urgent than there should be the clarity, transparency, rights and obligations that would for example, be imposed by their inclusion within the remit of this Bill. The individual case mentioned in its own way makes an argument as to why the legislation ought to be more modern and up to date to save people from just such a circumstance. I am not exactly sure why the mutuality, the ownership structure and non-profit making nature are sufficient reasons for exclusion.
For the purpose of argument we will call them credit unions or friendly societies. They do not lend to just anyone; any consumer cannot go to those institutions and and ask for a loan. One has to be a member. Therefore, they are not in the wider consumer arena; their doors are not open to anyone except members. That is what I understand and I presume it is the same for all of those bodies.
To what extent is that a fairly arcane distinction as between public and membership? Membership is required as one of the rules but it is the public who are members.
It is like selling a ticket for a draw for a political party; one becomes a member on buying a £20 ticket. I am currently trying to sell many such tickets. As Deputy Rabbitte was talking, the arcane interpretation of "membership" suddenly struck me. I understand — nobody has officially told me this — that membership of those societies for the purposes of granting loans means membership in full name, which is the total meaning of the term.
Deputy Rabbitte asked me why friendly societies were not open to the wider consumer public. As Deputy Bruton correctly said, although none of us alluded to it — I slightly alluded to it when I said that truth in lending should be the main objective of every institution — they go about their business in a consumer friendly way. Members who get a loan are not extended beyond their powers of redemption. These societies give helpful and friendly advice. We are currently transposing an EU directive, although we are going beyond its provisions because it does not recognise credit unions. When one goes to a credit institution, one is — I have been sharply upbraided by banks and lending institutions when I said this in newspapers — in an imbalanced situation. When consumers go to a credit institution, they are immediately in a position of dependency and those giving the loan are in a position of power. One is going cap in hand to the institution. It should not be that way, because one will pay heavily for their services. There is an immediate imbalance of power between those seeking and giving a loan.
With regard to knowledge, this Bill is only a start. The consumers are not infused with knowledge about their rights or about what is, or intended to be, on offer. This is not so in the case of the person giving the loan. Knowledge is power, and so is money. There is an imbalance between dependency and independence, between those seeking a loan and those giving one. There is a more level playing pitch in credit institutions and friendly provident societies. There is no sense of unwanted intimidation when a person goes for a loan to such institutions. That is why we referred to, albeit in a glancing fashion, the new legislation. I hope — this is only an informal remark, which does not come from my position within the Department because I will not be dealing with that legislation — that credit institutions, in their enhanced status, will not lose their simplicty of approach and access to their services. However, that is only a personal remark.
Does the Minister think groups like tontine societies would be covered under this legislation? Are they expressly included here?
Groups like the tontine societies would be under the section dealing with friendly societies.
Is there no doubt that it is included within the meaning of this section? We were totally ineffective in being able to protect them — I do not care whether the Minister calls them the public or members — in that situation.
We seem to have been ineffective and the Registrar of Friendly Societies is currently working on this. I know about that group only because of the measure I put through the Dáil. Deputy Rabbitte correctly identified them. What they did seemed to have happened in an untoward fashion, but it is the exception which proves the rule. I would not like to see the fine interpretation of credit unions and similar societies tarred with what was an unfortunate series of events with one group.
I agree with the Minister. I am not equating the affairs of the tontine society with any credit union; I know of no comparison. However, since my trade union days, bus drivers and ordinary workers on average or less than average wages who were cheated out of their savings have been around to all the politicians in Dublin, to Ministers and various agencies and authorities, but have not been able to get any redress. They would probably look askance at the Government now introducing legislation on consumer credit that would, in their view, allow the same practice to occur. If the legislation was ineffectual in giving these workers redress, that situation could be repeated. Why should they not come under the scope of the legislation?
Deputy Rabbitte is seeking to use one bad case as a conduit for bringing all of those institutions under this Bill, which is a little excessive. These institutions are far better at dealing with their members and loans than those which we are primarily concerned with in this Bill. Legislation on these institutions is also forthcoming. It remains to be seen what will be in that legislation. I am sure there will be some provision for the regulation of the type of incident of which the Deputy spoke, which should not have happened and should never happen again.
Is it not the case that any small number of individuals could repeat what was done by the tontine society? When people are sufficiently unscrupulous, there are always others gullible and trusting enough to contribute their savings and be cheated. Those who were victims in that situation would want their cases ventilated. If the Minister is saying that there is a tightening up of the legislation in that area that would prevent a recurrence of such cases, I am prepared to accept her argument that it is a once-off, an aberration and an exception that proves the rule. However, if such a case could happen again, it would be reasonable to call for its inclusion.
I will ask my officials to bring the issue raised by Deputy Rabbitte to the attention of the Registrar of Friendly Societies. I had many constructive meetings with him when that regulation was going through the Dáil because I needed some background knowledge. It was then that I came upon the misdeeds of the tontine society; they had built up an exclusive membership who worked many contracts. I promise to bring to the attention of the Registrar of Friendly Societies the Deputy's wish to get an assurance that there will be a tightening up of the regulations governing friendly societies to ensure such an event will not happen again.
Is the amendment being pressed?
Having regard to what the Minister said, we will use the opportunity between now and Report Stage to tease the issue out.
I will return with the report of the Registrar of Friendly Societies.
Amendment, by leave, withdrawn.
I move amendment No. 31:
In page 13, subsection (2) (a) (ii), line 14, after "1977," to insert "or".
Amendment agreed to.
I move amendment No. 32:
In page 13, subsection (2) (a), to delete lines 15 and 16.
This amendment deals with the exemption of local authorities from the provisions of the Bill. The local authorities, who are now a major mortgage provider in the case of low income households, should be governed by the provisions regarding housing loans and mortgages provided by anyone else. These worthwhile provisions include, for example, warnings to people about the notice that will be given to them and so on.
The housing loans made by mortgage lenders are coverd by Part IX of the Bill, which contains numerous sections designed to protect the consumer. The local authority should be treated as a mortgage provider on the same basis as anyone else. It would only apply to mortgages, as their home improvement loans would be secured on the house, which would place them all under the provisions of Part IX of the Bill. The Progressive Democrats and Democratic Left are of the same opinion on this issue.
I support the amendment, to which I have put my name, as I have put down a similar one. It is in the nature of the transactions that have been carried out by local authorities vis-�-vis mortgagees, tenants and people of that nature that the local authorities should be brought within the ambit of the Bill. The Bill gives a good deal of badly needed protection to a range of consumers. The protection it offers should be extended to those who have low cost housing mortgages and loans of that nature from local authorities.
During the course of the Bill I had discussions with Threshold Limited, an organisation with much contact with those dealing directly with local authorities. It has a clearer overview of the situation than I have, despite the fact that from time to time I deal with complaints from constituents of mine regarding the manner in which transactions are carried out by Cork City Hall. It would be sensible therefore to extend the provisions for the Bill to those who obtain loans of the nature described from local authorities and to bring local authorities within the ambit of the Bill.
I wish to query if Deputy Bruton is correct when he says the issue is only in respect of mortgages. Is that not taking a narrow definition of the transactions that transpire between local authorities and the public? There are other transactions which fit within this broad definition of credit and I would be interested in Deputy Flood's view on this. In my experience members of the public — for example, tenants of Dublin Corporation — have got themselves deeper into debt as a result of the manner in which certain transactions are effected between themselves and the local authority, cases where there is a lack of clarity and of the requisite information being provided and of being informed post hocof having accumulated serious rent arrears and so on. For example, a woman called into my clinic on Saturday——
We were all busy on Saturday.
——to explain that her husband had been self-employed running a chip van in the Tallaght area. As a result, the business of assessing her rent became exceptionally complex and she experienced terrible difficulties with Dublin Corporation. In the event the husband became unemployed; but Dublin Corporation advised her, out of the blue, of an accumulated arrears position dating back four years, although she had a regular and consistent record of payment. It will take weeks to unravel the situation, as it does with many of these cases. It is a regular occurrence. In that case I am satisfied, having heard both the corporation's side of it and her side, that there waa lack of clarity and so on.
There are impositions in the Bill which would assist the purpose of clarity in the relationship between tenants and their local authority. These transactions come within the scope of the Bill, as do other transactions between the public and lending institutions.
Would the Minister agree to consider this issue? There is a wide base of concern on the relationship between the local authority and their tenants and borrowers. The local authority frequently acts in an arbitrary fashion regarding the issues of determining a person's payment schedule and the rent due. For example, on the basis of the tenancy agreement, if a member of the family is staying with a tenant and he or she is not in a position to prove that person's income or lack of it, an arbitrary amount of outstanding arrears will be charged. There is litte comeback on it because it will find its way into the courts, with all sorts of problems for tenants.
The other crucial area is borrowing by people through the local authority to purchase their own homes. There can be serious difficulties regarding the way local authorities deal with people taking up loans, I await the Minister's comments and the views on why section 3 (a) (iii) is contained in the Bill.
When I started my study of this Bill I asked why are local authorities not included in its provisions? Like all members on the committee, I deal with people who deal with local authorities, both in the years I spent on urban and county councils and also in my weekly business with constituents. I addressed the issue of mortgages and I do no intend to consider housing rents or local authorities. Later, I will address the issue of seeming transparency and the need for it; but that is another issue, relevant to all areas of life.
Regarding the issue of mortgages advanced by a local authority, I asked my officials and others to consider the possibility of including local authorities who give mortgages to people within their area. This issue has obviously concerned members of the committee. I studied the submission from Threshold Limited and from others, and considered the matter fully with the Department of the Environment and with my colleague, the Minister for the Environment, Deputy Smith.
The Bill is aimed at those who advance money for profit. Clearly, the county council, urban council or whatever relevant authority is not advancing money for profit. It is advancing mortgages and credit to those who qualify for the housing loan from the county council. I understand the upper limit in respect of qualification is £10,000. It is aimed therefore at those who could not otherwise get finance from a commercial lender and an applicant must present an application fee together with applications made to and letters of refusal from the commercial lenders. Loans will not be granted before an application is judged eligible to be considered. The local authorities do not lend for profit, they lend to a group of people who cannot——
That is a clear answer which defines the Minister's position. However, it's no longer an adequate answer. With the greatest respect to the Minister's civil servants and advisers, I suggest that they probably never considered that because an organisation is not there for making profit does not mean its relations with its consumers——
I am going on to that.
——are not just as entitled to be regulated as if it makes a profit.
The Deputy has preempted me. I was going on to say that they do not make a profit and are aimed at a particular group of consumers. We all recognise this. It is becoming more difficult to obtain local authority loans due to the upper limits and refusals from other agencies. I agree with the Deputy that the provisions dealing with clarity and transparency in the relationships between lenders and borrowers need to be as definite and clear for consumers who borrow from local authorities as they are for those who borrow from commercial institutions. I told the Minister for the Environment that although I accepted the provisions about non-profit making, this did not mean one does not have to be clear, transparent, open and accountable in all mortgage dealings with consumers. As a result, when the Bill is passed the Department of the Environment will quote the APR and will have official documents, warning notices, duty to supply documentation and communications regarding possible repossessions. The provisions in later parts of the Bill relating to the need to protect consumers will be transposed by that Department into its housing regulations and the regulations of local authorities.
I cannot legislate for the Department of the Environment or for housing regulations for which its Minister is responsible. I have a clear responsibility to ensure transparency, that consumer transactions are open and that consumers have full information. This will now come within the remit of the Department of the Environment and its housing officials. The Minister for the Environment saw the need for this and needed no encouragement from me. Both of us co-operated in bringing mortgages within the scope of this Bill. The directive did not refer to the need for local authorities to be more open. The Department of the Enviroment will transpose provisions in this Bill, such as the need to explain warning notices and lengths of time, on to its own Bill.
I will withdraw amendments Nos. 39 and 40 with a view to resubmitting them on Report Stage. I want to make some changes to them.
In this area, promises from Ministers have to be taken with a pinch of salt. Ministers promised on umpteen occasions that Telecom Éireann would become subject to the Sale of Goods and Supply of Services Act, but this never happened. Consumers dealing with local authorities should have the protection of law. We make laws so that if ultimately things do not work out people have redress. The fact that the Minister for the Environment has a warm glow about some of these things and would like to see local authorities do them is not sufficient. As Members of the Oireachtas this will be our last chance to deal with this. The Minister for the Environment will not come to the Oireachtas with regulations to improve the Bill. He has not published such regulations to accompany it. If he did so, I would take a different view but, as of now, the Minister is asking us to buy a pig in a poke. The Telecom case is evidence that Ministers are better at promising than delivering.
I also urge the Minister to reconsider this matter. We are putting in place very comprehensive consumer protection legislation. In my experience, consumers who most need protection are those who have transactions with local authorities. They are among the most vulnerable in society and are least streetwise when it comes to having control over their own financial transactions. I am disappointed they are now being excluded from the Bill's provisions. The exclusion of local authorities limits the Bill's effectiveness. If the Minister for the Environment wants to reinforce whatever is being passed in this Bill, he is open to do so in any future housing Bills he brings before the House. I am not aware of any Bills he is proposing to introduce nor am I aware that any legislation that has ever come from the Department of the Environment had that——
Consumer bias.
——consumer bias, exactly. I have never seen it and I have been a member of a local authority since 1979. This is a great opportunity, for those of us with direct knowledge of difficulties being experienced by our constituents who deal with local authorities, to extend the scope and provisions of this Bill to them. I urge the Minister to consider this more deeply between now and Report Stage.
This is a civilised and interesting debate. I would love to be able to do what the Deputy suggests. I was a member of a local authority for a number of years since 1974. This Bill is based on my experience of dealing with people on low income levels who lack the protection we are seeking to provide in this Bill. My first question was why are local authorities excluded? There is not a weekend during which I do not deal with people in relation to home improvements.
Between now and Report Stage the Minister for the Environment should produce the regulations and the system of redress.
I and my officials had discussions with the Minister for the Environment. Consumers clearly matter. I take the Deputy's point about Telecom coming under the remit of consumer legislation. One of my officials has informed me that strong dialogue was instituted with Telecom but this was not pursued. Consumer matters straddle a range of Departments and I do not have the powers to roam within the portfolios of various Departments and ask what they are doing in relation to consumers. I would love to do so but I can imagine the reception I would get. Chairman, you were a Minister of State at the Department of the Environment——
The Chairman cannot be any more super-friendly than he is.
He was super-friendly when he was in that Department. Consumer matters concern the Department of Health, the Department of the Environment, local authorities, the Department of Tourism and Transport and so on. There is a fair case to be made for some future Government making consumer affairs a straddling operation which would enable the person concerned to have a roving brief. However, I can just imagine the reception which that would get from civil servants and politicians. I have come across matters in the Department of Health about which I wish I could do something but the barriers are up because there is a section within the Department which deals with matters such as additives, labels and so.
The biggest difficulty which I found in dealing with the commercial institutions which came to see me — and they were all very friendly meetings — was their lack of awareness about what a consumer was.
The press did not say that they were all friendly meetings. I think the Minister had to wave a big stick.
When they put forward their point of view they could not see that it was a consumer Bill and not a product-driven Bill. There was great inability on their part to see that I was coming from the consumer point of view. The county councils do not have that inability because they are not operating on an uneven playing pitch. They are not there to make money or to browbeat would be applicants. They are there to give the loan if the person fits into the income bracket and can provide the P60 and so on.
I am not enabled in my present position to legislate for the Department of the Environment. However, I will undertake to put forward the view that following this debate today it is the wish of this committee and myself that the consumer protection afforded to people seeking mortgages, which we are putting into the Bill, be extended to the local authorities. I will ask the officials to report back on this before Report Stage.
That is excellent.
Deputy Rabbitte indicated that he wished to press the amendment but he was not aware of what the Minister was prepared to do in this case. In view of what the Minister has said——
Is there leave to re-enter on Report Stage?
Yes. One particular point was raised by Deputy Quill — and I want to remain impartial, I do not want to take sides — about the weaker sections of the community and that the people who now get local authority loans are people rejected by lending institutions.
They must come armed with their letters.
That is extremely important and maybe it will do something to convince them.
I do take the point which is why I said the debate was very good. We are going to go, armed with the authority of this committee, to see if the regulations can be brought forward at the same time as the Bill. It would be something if we could manage that.
Amendment, by leave, withdrawn.
I move amendment No. 33:
In page 13, subsection (2), lines 19 and 20, to delete paragraph (c).
This amendment suggests deleting the provision that the Act would not apply to pawnbrokers. I know there is a separate Act dealing with pawnbrokers. However, one of the things which strikes me as very strange is that under section 29 of the Pawnbrokers Act, 1964, where a pawnbroker proposes to sell off an item which has been pawned, there is no obligation on him to issue warnings of any sort — although I am informed that many pawnbrokers do in cases of items above a certain value. I would have thought the Pawnbrokers Act, 1964, would have been improved by the introduction of some of the pro-consumer elements which we have here. I would have to say that the——
I am sorry for cutting across the Deputy, but what does he mean?
Section 29 of the Pawnbrokers Act, 1964, would be much better if it was governed by the sort of provisions which we have here, in regard to ten days notice being given to the consumer. Section 54 of this Bill would have great relevance to the Pawnbrokers Act, 1964.
Would the Deputy read out that section of the Pawnbrokers Act, 1964, because other Deputies might not be in possession of that document?
Section 29 of the Pawnbrokers Act, 1964, essentially deals with cases where people have not made their payments on the objects they pawned and it then falls to the pawnbroker to sell off the goods.
Without informing the person.
There is no obligation on him to inform the person who has pawned the item that the item is going under the hammer. Our provision in section 54 is very different in that enforcement action would not be taken until he served the consumer with ten days' notice and there are other provisions about 21 days, the consumer having a right to respond and so on. Such a provision would have improved the Pawnbrokers Act, 1964.
Perhaps it is not essential that we do it here, in that the Minister is proposing in the Sixth Schedule to make a substantial block of amendments to the Pawnbrokers Act, 1964. If the Minister was able to tell us that she will be able to accommodate or propose some changes in that Sixth Schedule perhaps we could get over the problem. I would like to see the Pawnbrokers Act, 1964, brought up to date. The Minister may know that even with the changes she is proposing, the vast majority of pawnbroking is now done under money lending licences.
They have a licence.
That is because the Minister responsible for the Pawnbrokers Act, 1964, — not this Minister — has never updated it. Even now, the updating is extremely modest and, effectively, we will still have pawnbrokers operating under two Acts. There was an opportunity here, in providing consolidated consumer credit legislation, to get this together and have a separate pawnbroking section in this Act. Let us put into the Pawnbroking Act, 1964, the sort of modern pro-consumer provisions which we would like to see.
I had a very lengthy meeting with the pawnbrokers' association — I met everyone under the sun involved in this Act — and they were concerned with several matters, one of which was the limit. We went back to them after we had made investigations into what we could do. As we all know, they have now diminished greatly in number. I was a regular tripper to York Street when I was a student.
Were you?
I was indeed God rest my father, but one morning I pawned his dress suit which I had borrowed for my boyfriend of the day, and I never got it back.
The boyfriend or the suit?
The boyfriend is gone too, but I never got the suit back and there were ructions when my father went to look for it. There was a pawnbroker in York Street who was a very friendly sort of person.
The Pawnbrokers Act, 1964, under which pawnbrokers are governed is, as we know, the responsibility of the Minister for Justice. When the pawnbrokers came to see me they were also on a mission, as I understood it, to meet officials from the Department of Justice and had made submissions about updating their law.
In Part XII, section 121, of this Bill provisions are made, as Deputy Bruton pointed out, to amend the Pawnbrokers Act, 1964, in order to have it comply with the terms of the EU Directives on consumer credit. We have just done the bare minimum, so to speak, in order to comply with the EU Directive relating to pawnbrokers. However, the provisions of the 1964 Act are quite unique to the people operating that business. It is not our belief or the thrust of the European legislation that the general provisions of this Consumer Credit Bill, 1994, would apply.
I was amazed to find out that there are now only four pawnbrokers' shops in the whole country. They are also licensed as moneylenders. A pawnbroker is entitled to carry on the business of money lending provided he possesses the licence to do so. I had interesting discussions with the Irish Pawnbrokers Association and others with people who would be dealing with pawnbrokers. I cannot infringe on the jurisdiction of the Department of Justice, but I understand they will be revising the provisions of the 1964 Act. It would be outside my remit to go further than I have by including pawnbrokers, because they operate as moneylenders as distinct from the point raised by Deputy Bruton relating to clarity and consumer knowledge.
The Minister is basically saying that there is a breakdown in communications between the Department of Enterprise and Employment and the Department of Justice. We proposed sensible, pro-consumer amendments to the Sixth Schedule to the Bill. There are about 40 proposed amendments to the Pawnbrokers Act. Can other amendments similar to this one be accommodated by the Minister, or is she saying that is within the remit of the Minister for Justice and that——
No, I am not saying that.
——we cannot propose amendments?
The Deputy was in Government himself.
I was not really.
He was interested in consumer matters when he was in the Department of Industry and Commerce. Each Department has a remit within which it proposes legislation and deals with existing legislation. The clarification and financial knowledge of consumer matters is new to us in Ireland. I hope the time will come when the person with responsibility for consumer matters will be listened to in all Departments.
The updating of the Pawnbrokers Act is within the remit of the Department of Justice. Provision is made in Part XII to amend it to enable compliance with the European directive and the incorporation of provisions of the European directive as they relate to the moneylending aspect of pawnbroking. They must have licences to do this, but I am not prepared to go further at this point.
That is very unsatisfactory. We are being asked in the Sixth Schedule to this Bill to accept numerous amendments to the Pawnbrokers Act and we are being told that they are non-negotiable. What is the point of debating this element of the Bill? The Minister for Justice should have dealt with this area and allowed a proper debate to take place on another committee.
The Minister is being put in an impossible situation by the Department of Justice. I am not criticising what she is saying, but it is not an acceptable way to proceed with business. There are things we clearly want to do, and if the Minister for Justice was here to listen to the debate she might be persuaded that they were worth doing. I ask the Minister to raise this point with the Minister for Justice. At the very minimum there must be a case for a legal right to notice if one's property is being sold. This is a golden opportunity for the Minister to do what she plans.
To transpose the consumer protection aspect——
Element.
I see the Deputy's point.
We are being asked to accept many amendments to the Pawnbrokers Act.
What the Deputy is saying is no more than what was said about local authorities and having evidence of transparency and the transposition of information requirements. I will ask my officials to liaise with officials in the Department of Justice and I will undertake to speak directly to the Minister for Justice, Deputy Geoghegan-Quinn, and ask her to consider the matter.
Amendment, by leave, withdrawn.
We agreed to adjourn at 6 p.m. It would be unwise to start considering another amendment at this stage. As we have not completed our work, I suggest we adjourn and resume the debate on this Bill on Thursday next at 10 a.m. There is a problem about getting a suitable venue, but it will probably be in the Dáil Chamber.
How could it be in the Dáil Chamber?
It is committee week.
The Casual Trading Bill is also being taken in Committee. Will we be proceeding to complete this Bill before we take the Casual Trading Bill?
We will be considering the Casual Trading Bill next Tuesday. We are sitting on Tuesday, Wednesday, Thursday and Frday of next week.
We will be dealing with the Casual Trading Bill.
Are there committees everyday next week?
Yes. We will be dealing with two Estimates as well.
What days are the Estimates?
It is very tricky. I find it quite difficult to discuss this Bill and then switch to the Casual Trading Bill.
There is a problem about the availability of Ministers and rooms suitably equipped for committees.
Would it not be open to us to deal with this Bill on Tuesday and make some progress?
It would seem to be the sensible approach to complete this Bill before going on to the next one, but, unfortunately, it is determined by the availability of Ministers.
I certainly see a difficulty. I would not like to be facing into the Casual Trading Bill.
I am involved in the debate on the National Monuments Bill.
That is because the Deputy is cultured.
The Select Committee adjourned at 5.55 p.m. until 3.30 p.m. on Tuesday, 17 May 1994.