We will debate amendment No. 160. Amendment No. 161 is an alternative and amendment No. 163 is related. By agreement, we will discuss amendments Nos. 160, 161 and 163 together. Is that agreed? Agreed.
SECTION 52.
I move amendment No. 160:
In page 34, subsection (1), lines 17 and 18, to delete "such formula as the Central Bank may, from time to time, specify" and substitute "any method or formula approved for that purpose——
(a) by the Central Bank in the case of a credit agreement where the creditor is a credit institution, or
(b) by the Director in any other case".
This section provides for the proper arrangements with regard to early payment of a debt.
My amendment is to provide that the Central Bank consults the Director of Consumer Affairs whenever it set a formula for deciding what reduction would apply where people decide to close an agreement before the expiration of the fixed term. The Minister is saying that she will not allow the Director of Consumer Affairs to be consulted except, effectively, in the case of moneylenders because a credit agreement covers virtually every other instance. These amendments are not alternatives as the Chairman suggested. There could still be consultation by the Central Bank with the Director of Consumer Affairs if the Government was willing to allow that. The principle of consulting the Director of Consumer Affairs about anything affecting consumer credit appears to have been accepted, so it strikes me that my amendment stands alone and is still a reasonable position to adopt. I would like to hear the Minister's reaction to it. As the Minister often said, the Central Bank has never really seen itself as particularly defending the consumer's interest, so we should at least provide for consulation with the Director of Consumer Affairs.
On a point of clarification is the Chair saying that amendments Nos. 160 and 161 are alternatives?
Yes.
They are not alternatives.
They may be amending the same area in the Bill but they are not really alternatives. I am asking that the Central Bank consults the Director of Consumer Affairs before setting out its formula. Perhaps the setting of this formula is not very tendentious.
There is nothing to prevent the Deputy from putting these amendments separately.
Amendment agreed to.
I move amendment No. 161:
In page 34, subsection (1), line 18, after "may" to insert "after consultation with the Director of Consumer Affairs".
I have outlined why I consider it worthwhile. I would like to hear the Minister's views on it.
I accept that while amendment No. 161 relates to the same section and is about the same matter, it involves a completely different approach. Within subparagraphs (a) and (b) of amendment No. 160 I have reasonably addressed the issue.
Are these formulae already known? Do we know what line the Central Bank will take in relation to discharging agreements prior to the time fixed by the agreement? Presumably, this is not an unusual or new occurrence. Perhaps the Minister will explain what will happen now; whether, if the Director of Consumer Affairs, for one reason or another, felt what happened to be offensive, he could challenge it in the way he has the right to challenge other elements of credit agreements?
Could the director challenge it in any other case? Is Deputy Bruton talking about my amendment?
My understanding is we are saying that the Central Bank will set out the formula which will decide how much has to be paid back in the event of early repayment. First, do we already know what rules the Central Bank will apply in such cases? Second, if, for one reason or other, the director felt unhappy with what the Central Bank was doing, would he have the right, through the other sections of the Bill, to challenge the Central Bank on what it had done?
The Central Bank has not devised a set formula which would apply in different circumstances.
My second question was: would this be regarded as a credit agreement which would be open to challenge by the director if he was unhappy with their formula?
No.
After the passing of the Act?
No, it would not.
That was the rationale behind my amendment.
I know it was. That was why I said it was a sort of follow-on to the major point with which we dealt last week in which, other than the transaction charges, it would seek to introduce the director's voice into an arrangement which the Central Bank has at present. We do not envisage that.
On balance, I will withdraw the amendment in that I do not foresee this being an issue that will cause controversy in practice. Nonetheless, I still think the principle enshrined in my amendment is better. I do not propose to press this amendment at this stage although I do not see why the Central Bank should uniquely in this regard decide the terms of an agreement terminated early and have sole remit in this area. Everywhere else we talked about terms of credit agreements we recognised the director having a role. There seems to be a slight inconsistency in the Minister's thinking in this regard. Perhaps I will retable this amendment on Report Stage.
Deputy Bruton certainly pursued the common point made on the earlier amendment. I have also been consistent.
Amendment, by leave, withdrawn.
Amendments Nos. 162 and 164 are related and, by agreement, maybe discussed together. Is that agreed? Agreed.
I move amendment No. 162:
In page 34, lines 19 to 22, to delete subsection (2) and substitute the following:
"(2) The Minister, with the consent of the Minister for Finance, and after consultation with the Central Bank, may make regulations in respect of the method of calculation of the reduction of the total cost of credit referred to in subsection (1).".
This amendment relates to the regulation to bring into effect what the formula will be.
I do not understand the distinction being drawn between the two sections. I beg the Minister's pardon, I thought we were on Amendment No. 163——
——to which amendment No. 164 also relates. One would think this was so. In other words, when the Central Bank would have arranged the matter of what amount and the formula to apply to the reduction in the early repayment of debt, this provides for the Minister of the day having the power to bring in that regulation. My reading of that would be that one can intervene in that process. I am informed it is not but that is my reading of it.
The Minister may intervene in the process?
That is what it states. It states: ". . . may make regulations in respect of the method of calculation of the reduction of the total cost of credit referred to in subsection (1)". I am informed by my officials that it is not, it is merely a mechanism for bringing into being the already arranged regulation by the Central Bank. I could perceive this provision being challenged by somebody.
I too have a similar difficulty.
I am advised that its purpose is to enable me, or the Minister of the day, to bring in the regulation already agreed to by the Central Bank formula.
That means the Central Bank does not have power in this area under its own Act.
Clearly there would be changes according to different sets of arrangements and agreements. My reading is similar to that of Deputy Richard Bruton.
I agree with the Minister since subparagraph (2) of the amendment it states: "The Minister, with the consent of the Minister for Finance, and after consultation with the Central Bank, may make regulations . . ." Let us suppose a Minister consults but disagrees with the Central Bank. Is the Minister then saying that he or she cannot make regulations?
Am I saying it?
Is that the understanding we are taking out of this particular subparagraph? Let us say the Minister consults the Central Bank but disagrees with its interpretation. Is the Minister then saying you cannot make regulations?
The terminology used is "may". My reading of this subparagraph is at variance with the interpretation given to me of its meaning. That matter is very serious.
I go along with the Minister. I am taking her side on this.
It is not an attitude; it is my interpretation from a reading of it.
I understand the Minister's position on this, that from reading it, she is correct.
So do I but I am advised to the contrary. I seek permission to have this reviewed because it is a very serious matter.
Is the Minister withdrawing her amendment?
Yes and I will resubmit it on Report Stage.
The other slight inconsistency is that the director has power——
Of course, it is inconsistent with what we have just dealt with in amendment No. 162, whether it is the fault of its wording or that we are all dumb, so to speak, in interpreting it, which I very much doubt since we are all of the same view.
I will resubmit amendments Nos. 162 and 164 on Report Stage.
Amendment, by leave, withdrawn.
Section 52, as amended, agreed to.