Amendments Nos. 127 to 129, inclusive form a composite proposal and amendment No. 130 is an alternative to amendment No. 129. These amendments may be discussed together. Is that agreed? Agreed.
SECTION 43.
I move amendment No. 127:
In page 29, subsection (1) (a), line 41, after "consumer" to insert "and".
This amendment and amendment No. 128 are for drafting purposes and involve inserting the word "and" in a different place. Amendment No. 129 involves deleting paragraph (c) of this section and is tabled by Deputy Bruton and me. Deputy Rabbitte also has an amendment.
I welcome the Minister's co-sponsoring of this amendment. In the case of communications to a borrower, the logo of a lender should not be prominently displayed or emblazoned on the envelope. The purpose of the amendment is to preserve privacy and this change is welcome. Is it appropriate to make a comment on the section as a whole at this stage, Chairman?
We should deal with the amendments first; I have to allow Deputy Rabbitte to discuss his amendment also.
It appears amendment No. 129 and my amendment No. 130 have the same effect — perhaps the Minister has been advised that hers is a neater arrangement. The intention is to protect the privacy of the borrower. There can be embarrassing consequences in certain circumstances if one is in regular receipt of the type of envelope none of us likes to receive and the envelope shows exactly where it comes from and what the letter contains. In my trade union career I encountered people who were preyed upon because they were known to be vulnerable through having trouble with various creditors, especially in housing matters. It is desirable that the Bill prevent financial institutions from sending communications which visibly show they were sent from a banking institution, building society or other creditor.
I agree with the spirit and intent of the amendments but we should consider circumstances where a communication is misdelivered and arrives at the wrong address. The person who wrongly receives the letter may not know what to do with it and there will be nothing on the outside of the envelope to give an indication of how to deal with this correspondence. In that event the person may well open the envelope and the privacy we are setting out to protect would be invaded.
If these amendments were taken as they are framed, we might leave a loophole which would allow for the exact opposite effect to that intended. We must make provision on the outside of an envelope for such a situation if it arises. We often get correspondence which has been misdelivered. I heard a story on "Morning Ireland" today about a letter which was sent by An Post to Cúil Aodha, but which was delivered in Dar es Salaam. It is not outside the bounds of possibility that this could happen with An Post or a similar delivery body. We must anticipate such a situation to ensure that it does not happen.
If a letter was sent to my house, 1 Wellington Road, but it was delivered to number 2 and that householder opened the letter, he or she would know my business. That is what we are trying to pre-empt. I recommend that a post office box number, a delivery mechanism, be stated on the outside of the envelope so that if a letter is undelivered, it could be returned to a post office box.
If such an arrangement was provided for in the Bill, it would avert the type of situation I anticipate. It is essential that we do this because we must protect people's privacy even on the off chance that this might happen. Letters are frequently misdelivered. We must ensure that letters are returned to the sender so the mistake may be rectified without revealing the identity of the person from whom the communication was sent.
I have no problem with the principle of a post office box if it was anonymous, but in practice I do not believe the situation described would happen. If a communication is wrongly addressed, the person who receives it will recognise that it is not addressed to them and will send it to the correct address or will open it in error in their hurry to read it. While I have no objection to a post office box if it preserves people's privacy, the addition of a return address would not do so. However, we are trying to provide for situations which are a little far-fetched.
I will leave it to the Minister to come down on either side of these weighty arguments. However, my amendment would allow the retention of paragraph (c), the return address, but not the name of the creditor and that would cover Deputy Quill's concern, that is, a return address or the facility for a return address, but not the name of the institution or otherwise. It is a case of excising the paragraph or putting in something like that.
We all know of situations where this would have implications for a family and martial harmony where husbands — they are the main aggressors in this situation — profess to be alarmed when it is brought to their attention that the household is in debt to some institution as if they had nothing to do with it. When dealing with constituents, I find that a husband is, or claims to be, unaware of transactions with certain agencies conducted by the woman in the house. That is another element of privacy which should be protected.
Amendment No.130, in the name of Deputy Rabbitte includes the word "creditor". Is the creditor the consumer in the Minister's amendment?
The creditor is the lending body or the institution.
The lender.
In cases where a number of businesses occupy one building, how would one deal with the situation outlined by Deputy Rabbitte where people would have to open mail to find out who the letter should be returned to? That is something which we must tease out in relation to Deputy Rabbitte's amendment. I agree with the intent of his amendment and what he is trying to achieve.
My amendment and Deputy Bruton's amendment seek the deletion of any return name or address on the envelope. I had the situation which Deputy Quill spoke about in mind when bringing forward this Bill where a misaddressed envelope could be opened. I find in constituency work that envelopes which have been wrongly addressed or where someone has moved are returned. We have tried to devise a way which provides the most privacy. Deputy Bruton's amendment and my amendment address that issue in that the name or address of the sender are not on the envelope, which should be clearly addressed.
We must decide which amendment best protects people's privacy. Privacy would be best observed if there was no name or address on the envelope, although cases will arise where a letter is misdirected. There is a greater sense of invasion of privacy if the name and address of the sender is clearly printed on the envelope because everybody will know a person's business, including the postperson or anyone else who sees the envelope.
Would the Minister consider a post office box number as a suitable way to get around that dilemma?
I am dealing with the three amendments before me. While Deputy Rabbitte's amendment has the same thrust as the others, he mentioned having the address, but not the name of the sender, on the envelope. Number 10 Main Street would clearly identify where a letter came from because the address would be known. My amendment, in conjunction with that of Deputy Bruton, is the best way to address the issue of privacy. We received representations in relation to this from the Department of Social Welfare and poverty groups which made it clear that the best arrangement would be not to have a return name and address on an envelope.
Amendment agreed to.
I move amendment No. 128:
In page 29, subsection (1) (b), line 42, to delete ", and".
Amendment agreed to.
I move amendment No. 129:
In page 29, subsection (1), line 43, to delete paragraph (c).
Amendment agreed to.
Amendment No. 130 not moved.
Amendment No. 131 (a) is an alternative to amendment No. 131 and both may be discussed together. Is that agreed? Agreed.
I move amendment No. 131:
In page 29, lines 49 and 50, and in page 30, lines 1 to 4, to delete subsection (3) and substitute the following:
"(3) Where the credit agreement referred to in subsection (2) is a housing loan, the creditor or a person acting on his behalf may——
(a) for the purposes of the Family Home Protection Act, 1976, send any written communication connected with the agreement to the consumer's spouse, or
(b) where the written consent of the consumer has been given, send any written communication connected with the agreement to any member of the consumer's family or to a person designated by the consumer.".
There is a lot of interest in this section. Section 43 (3) provides:
Where a credit agreement referred to in subsection (2) is a housing loan, the creditor or the person acting on his behalf, may for the purpose of the Family Home Protection Act, 1976, or where the written consent of the consumer has been given, send any written communication connected with the agreement to the consumer's employer or to any member of the consumer's family.
The amendment is mainly for clarification purposes and is proposed on the basis of many representations made to me.
My amendment No. 131a proposed that the spouse would, under the Family Home Protection Act, be informed of the position in relation to a loan. For example, if the house were in jeopardy because of non-payment of the mortgage, the spouse would be informed of the threat this constituted to his or her position.
My understanding is that the Family Home Protection Act does not protect the spouse against a creditor obtaining a mortgage judgment against him or her. It is important that the spouse be informed if the loan is in arrears and have an opportunity to take action to deal with it.
The manner in which the Minister has reformulated her amendment is satisfactory. It is probably superior to mine as I did not delete the requirement for the consumer's consent. I am happy to withdraw my amendment and accept the Minister's restatement of this section.
Will the Minister provide that the spouse be informed rather than might be informed? If the spouse's interest is being jeopardised, there should be an obligation to inform the spouse of any risk to his interest in the family home. The Minister might consider amending subsection (a) on Report Stage to provide that the credit institution shall inform the spouse of the situation in relation to the loan. What precisely does the Minister envisage in subsection (b) of her amendment? We are providing that where the written consent of the consumer is being given, details might be sent to the consumer's employer. Is that to facilitate a direct debit from a pay cheque?
No. This was introduced following representations from various groups. Where notification, details or communications are required, the consumer would have to give permission in writing.
I have a query about giving information to persons other than the employer or family members in respect of whom consent has been explicitly given. We do not appear to restrict the right of the creditor, bank or moneylender to give information to all and sundry, for example, to another creditor.
It seems strange to explicitly provide that consent must be obtained if the family is to get information while it seems that the lending agency could freely give information to uninterested parties. I am a little puzzled as to how we deal with the issue of the lending agency sending communications about someone's personal affairs to those not directly concerned with the loan.
I had not noticed the last point raised by Deputy Bruton but I would like to hear the Minister's reply as it raises an interesting issue. I wish to comment on the first point which was that the Minister's amendment does not make it obligatory on the creditor to inform the spouse. She merely facilitates the creditor if he so wishes, for the purposes of the Family Home Protection Act, to bring a decision to the attention of the spouse.
This is a thorny issue and colleagues will have seen it work both ways. One is often confronted with the fall-out of divorce Irish style where a spouse, usually a woman with children, visits a TD's clinic having been deserted many years earlier. Her husband's name may still be on the deeds of the house or she may have been discharging the mortgage through the years and now wants to get the deeds in her own name.
There are many implications in this. Sometimes the financial institutions or local authorities deal with it rather creatively and helpfully, however, one can also meet the opposite case. A spouse who left the family home may be blissfully unaware of a debt being registered against him and the financial institution may not want to bring it to his attention. All the financial institution is interested in is the speediest, most effective and least costly way through the judicial process to register a claim against the creditor. The last thing it wants is to have to ascertain the whereabouts of the deserting spouse. We are aware of the heavy obligations on an applicant for deserted wife's allowance.
They have to follow their man metaphorically.
They have to follow him to Australia or Dar es Salaam where that letter from Cúil Aodha went by mistake. The only requirement is that the creditor may advise the spouse. There is a strong argument for the spouse having a right to be informed if a decision is to be registered against him or her. A spouse should have an opportunity to defend himself. The word "may" is not strong enough for that purpose.
I entirely support what Deputy Rabbitte said. As public representatives, we are squeamish about facing this issue. In the absence of divorce we find all types of ways around this question. While Deputy Rabbitte is right, sometimes officials are helpful in dealing with this area.
Sometimes the cure is worse than the disease. I have found in the local authorities that, because of the Family Home Protection Act, a woman buying a house has to go through a costly, convoluted legal process, including placing advertisements in newspapers searching for her husband who may have lived in the house for one day. I agree fully with Deputy Rabbitte. It is time we faced up to this issue and framed our legislation in a practical way to take account of the reality of broken marriages in our society.
The absence of divorce does not mean that marriages do not break down. There are many examples and the sooner we face reality, the better for all of us. Our legislation should reflect that rather than cater for a mythical make-believe world.
The remarks made are very interesting but this Bill is becoming a vehicle for the expression of many points of view. It is seen as the panacea for social ills and a vehicle through which they may be addressed. While it is detailed and technical, its perspective is narrow and, clearly, it cannot cover many of the valid points of view expressed. I queried this matter because we all deal with such cases in our clinics, mostly concerning women who are at the wrong end of transactions. The wording is the same as that in the Family Home Protection Act, 1976 — the "may " is part of that. Perhaps we should seek to make it more compelling as the Deputy seeks to do. I will have to come back to it because we cannot make the amendments on the hoof, so to speak.
Deputy Bruton seeks to put in the word "spouse", be it the man or woman. I have encapsulated that in amendment No. 131. He also raised the matter of the sending of information on a person's financial standing to other institutions or people. This is a matter on which the Deputy and I have expressed views recently. It is dealt with in sections 117, 118 and 119 in Part X and we will deal with it when we come to those sections.
My understanding of those is slightly different in that they seeking to offer some protection to the consumer when he goes to a bank and the bank turns to a credit reference agency to decide whether it will make a loan. Should lending agencies have unfettered rights to pass on confidential credit information about consumers to such agencies? The later sections deal with the subsequent use of that information by other lending agencies. Do banks, building societies or moneylenders have the right to pass on this confidential information willy-nilly to anyone they choose?
We are picking our way delicately to make sure that members of the creditor's family do not get to hear about their loan situation without their consent, but we seem to show no similar squeamishness about giving confidential information to strangers and those who can potentially make a profit from the information, perhaps to the disadvantage of the consumer.
Unfortunately, we are dealing with two things at the same time.
I sought to respond to the points.
I appreciate that and Deputy Bruton has made an important point on the second part of the amendment. Let us deal with the first part of the amendment to which Deputy Bruton's amendment No. 131 (a) relates. This only applies to a housing loan. I can see that the Minister is sympathetic to the point being made and she points out that she would need time to deal with it. It would not be practicable to require the lending institution in all circumstances to chase an errant spouse all over the globe in order to communicate with them on a routine matter.
However, if it is the family home — in 99 per cent of cases a housing loan refers to the family home — which is threatened by the lending institution initiating procedures to have an order for repossession secured against the consumer, in those circumstances it is entirely reasonable that the spouse ought to be advised and be aware of the implications. If it is reframed in the context of where the judicial process is initiated, when the ownership of the house is at risk and an order for repossession is being sought, in those circumstances it is fair that reasonable effort ought to be made to make the spouse aware.
I do not know whether the term "consumer" relates to where both names were on the deeds of the house. If both names are on the deeds of the house, does that automatically mean that "the consumer" means both spouses? Does it mean that, as it stands, the errant or absent spouse must be advised? It cannot mean "must" be advised because it says "may".
The duty on the lending institution ought to be at least one where reasonable effort would be made to advise the errant spouse that the family home is in danger of being repossessed and they ought to know that so as to prepare their response to it.
Where they are co-owners or co-signatories to a loan.
Yes, but the only requirement is that the creditor "may" communicate——
For the purposes of the Family Home Protection Act?
Yes.
The provision in the section "for the purposes of the Family Home Protection Act" would relate to a situation where there was only one signatory to the loan. The purpose of that legislation was to offer protection in the case where there was only one signatory. Nowadays, thankfully, there is co-ownership more often. Clearly if there are co-owners this does not arise because they both must be informed — that is common sense. This relates to those who are not so well placed as to be co-owners of the home and co-signatories to the loan.
The Deputy said that routine matters would not need to be conveyed but where the matters were important and imperative then the "may" should be removed and a greater degree of compulsion should be introduced. That raises the question of what is compelling and imperative and what is the point at which the interest of the non-signatory spouse becomes important.
Perhaps we should be amending section 54 which deals with the creditor's enforcement rights. Section 54 only refers to the consumer; in this section and these amendments we require a lender to serve certain notices if he intends to initiate any enforcement action. Perhaps when we come to section 54 we could take on that board.
Deputy Bruton talked about other credit institutions getting information about a person and having ready access to the creditworthiness of a potential consumer. Under the Data Protection Act, 1988 the Data Protection Commissioner is charged with responsibility in that regard. During the preparation of the Bill, I met many people, including a representative from the Credit Bureau of Ireland. Is it to this that the Deputy is referring?
Including the Credit Bureau of Ireland but not exclusively. This type of information is highly confidential, although to give the Credit Bureau of Ireland its due, it is probably one of the best in terms of complying with the provisions of the Data Protection Act. However, we would be permitting many others to receive this information. They might not keep computerised records and might not be covered by the Data Protection Act. The Credit Bureau of Ireland deals in this area and I understand that it rigidly adheres to the Data Protection Act.
I raised this subject with the representative from the Credit Bureau of Ireland, who was among a group that came to see me. I agree with the Deputy that the bureau appears to run its business well in seeking to implement fully the Data Protection Act. Part X, sections 118 and 119, appears to be the best way with which to deal with the concerns expressed by the Deputy.
I disagree. Perhaps I am misreading the position, and perhaps the Minister will correct me if that is so, but my understanding of the subsequent sections is that they only deal with what happens if a consumer goes to a bank and the bank then decides to call in a third party as a reference agency. My concern relates to what protection exists for a consumer at a much earlier point when his confidential information is passed on to these agencies.
The Data Protection Act.
The Data Protection Act comes in if they are maintaining computerised records. However, there are many which do not maintain computerised records. There should be a provision that protects the consumer and which requires some consent to the procedure if this information is to be passed on. We are providing legislation for banks but we are also providing legislation for moneylenders on a much smaller scale who will have access to confidential information about people. This information could be abused if it got into the wrong hands. Perhaps we should make a general provision in this Bill, rather than relying on the Data Protection Act to catch up with people. The fact that the leading credit reference agency in the field complies with the Data Protection Act is welcome but it does not deal with the wider point of protecting consumers from the passing on of information about their financial affairs.
The Deputy is talking about consumers who would not be entered into a data bank.
Yes.
The points made by Deputy Bruton are important. However, I return to a point made by the Minister of State earlier regarding the attempt to turn this legislation into a panacea for all the country's ills. We must be careful in this regard. The Data Protection Act is in place and if it needs to strengthened or amended to deal with the points raised by Deputy Bruton, we should set about doing that.
If the Bill is broadened to try to take account of Deputy Bruton's points, we may end up with a damaged piece of legislation rather than a Bill which is specifically aimed at consumer credit protection. Deputy Bruton's point is good but it should be tackled in the context of the Data Protection Act. If that Act has a weakness, ways to address it should be found.
I intend to submit proposals on Report Stage. However, Deputy Flood is incorrect because much of the restriction of the Data Protection Act involves its general application. One does not want to catch up personalised medical records in most elaborate data protection provisions. However, we would have a clear interest in protecting information in relation to financial and moneylending affairs in such a manner. This is the correct vehicle by which to deal explicitly with consumers' credit protection rather than trying to wrap up every piece of conceivable data with the same rules that would apply to credit information.
There are two different elements. I wish to establish if the Minister of State will consider amendment No. 131a in terms of Report Stage. If not, I wish to indicate that we will do so. This deals with housing loans and in terms of the Family Home Protection Act, 1976, it states that any written communication connected with the agreement may be sent to the consumer's spouse. The problem is that it is up to the creditor or lending institution as to whether it will do that. The phrase is that they "may".
There is a compelling argument for reframing along the lines that the lending institution shall be required to make every reasonable effort to bring a communication of the nature that we discussed to the attention of the consumer's spouse. It would be less imperative if the present wording was used, rather than "shall". It may be very difficult to make contact with the consumer's spouse in these circumstances. However, there should be an imposition on the lending institution where it is initiating the legal process to repossess the family home to make reasonable effort to bring it to the attention of the consumer's spouse.
I have great sympathy for Deputy Rabbitte's point. Perhaps the Minister of State could, after further reflection, try to accommodate him on Report Stage. The Deputy referred to a situation where a consumer's spouse was forced out of the family home. It is also common that spouses living together may not be in the habit of frequent communication. In many such instances, it is my experience that there is not a high level of correspondence. There are invariably three or four warning letters before the issue of legal proceedings.
It is not putting too much of a burden on lending institutions to put an obligation on them to communicate at all times to the last known address of the spouse or to use reasonable efforts to contact the spouse if they are not living in the family home. If there was more communication and the consumer's spouse was notified of certain difficulties, of which he or she may not have been aware, it may be possible to improve the position. It is not putting too much of a financial burden on lending institutions, local authorities, building societies or banks. They report very high profits and this legislation will not erode that position.
In terms of the Family Home Protection Act, there are instances where spouses only learn of impending proceedings when the level of arrears has become insurmountable and unmanageable. Invariably building societies and banks send warning letters when monthly repayments are in arrears by just one or two months. This is the time when both partners in a marriage may be in a position to tackle a situation of which one spouse may not be aware, such as a drink problem. On that basis, I have great sympathy for Deputy Rabbitte's comments. Perhaps the Minister of State could give them further consideration.
I know of a case personally where a woman did not know that the case had reached a certain point until the sheriff arrived one morning to evict her. This happened within the last 12 months. We have all encountered such cases. Deputy Bruton and I have sought to insert the word "spouse" and this shows progress. I agree to look at how we can word the section, as requested, at a later stage.
Amendment agreed to.
I move amendment No. 131 (a):
In page 30, subsection (3), to delete line 4 and substitute "spouse".
Having consulted with the Department of the Environment and considered the Family Home Protection Act, 1976, we will, if we can, reconsider a more compelling word.
Amendment, by leave, withdrawn.
Section 43, as amended, agreed to.