Amendments Nos. 238 to 243, inclusive, form a composite proposal. With your agreement, Minister, we will take amendments Nos. 238 to 243 together. Is that agreed? Agreed.
SECTION 96.
Amendment No. 237 not moved.
I move amendment No. 238:
In page 51, subsection (2), line 29, to delete "holder of an authorisation" and substitute "insurer".
The amendments are consequential and follow from each other. Authorisation was lifted from the Insurance Acts. The holder of an authorisation is different from that which would be meant by the insurance legislation. Therefore, the word "insurer" is proposed to replace "holder of an authorisation" or "holder".
I agree this is purely a technical amendment and I have no problems with it.
Amendment agreed to.
I move amendment No. 239:
In page 51, subsection (2), line 30, to delete "holder" and substitute "insurer".
Amendment agreed to.
I move amendment No. 240:
In page 51, subsection (2), line 31, to delete "holder" where it first occurs and substitute "insurer".
Amendment agreed to.
I move amendment No. 241:
In page 51, subsection (2), line 31, to delete "holder" where it secondly occurs and substitute "insurer".
Amendment agreed to.
I move amendment No. 242:
In page 51, subsection (2), line 32, to delete "holder" and substitute "insurer".
Amendment agreed to.
I move amendment No. 243;
In page 51, subsection (2), line 33, to delete "holder" and substitute "insurer".
Amendment agreed to.
I move amendment No. 244:
In page 52, subsection (2), to delete lines 2 to 4.
This amendment deletes from this section the definition of "mortgage intermediary" which has been transferred to section 2 by way of amendment No. 25. When we started Committee Stage of this Bill, the term "mortgage lender" was referred to in this and in many other sections. Amendment No. 25 changed the definition of "mortgage lender" contained in section 2. I agreed to that amendment, which was achieved by round table dialogue. There may be some difficulty in regard to the earlier taking of that amendment, but hopefully we can get back to that on Report Stage. For the purposes of this amendment, we have covered it by transferring it to section 2 by way of amendment No. 25.
An issue raised was then that it seemed to exclude accountants and others acting for their clients. As the Minister said, perhaps it would be more appropriate if we return to it on Report Stage.
Amendment agreed to.
Question proposed: "That section 96, as amended, stand part of the Bill".
It is a pity that an earlier amendment was not moved, but the issue of the exclusion of local authorities is causing considerable concern. I know we discussed this matter on amendment No. 32, but it is worth raising specifically in the context of housing loans made by mortgage lenders because this is primarily the business of local authorities.
People find it difficult to understand why a Consumer Credit Bill, which is introduced to regulate the providers of credit, should exclude one public sector provider of credit, namely local authorities. I know the Minister indicated he will suggest to his constituent local authorities that they should implement the provisions similar to those in Part IX of the Bill. However, it can rightly be argued that people are better protected by legal rights. If we are establishing legal rights of protection for all the other types of lenders of mortgages, we should apply the same rules in respect of local authorities. Having legal rights means that they can seek redress before the law if they wish, for example, before the Director of Consumer Affairs in respect of areas in which he would have a say, namely, on excessive charges or any sort of unfair term that may be introduced by local authorities.
I suppose the Minister can argue that she would be hereby regulating an area the responsibility of another Department, but if we decide that we will have omnibus legislation to cover all aspects of consumer credit, it makes no sense that certain groups should be excluded simply because they are overseen by another Minister who might be slow to pursue this. Ultimately people should have the protection of law.
I would like the Minster on Report Stage to introduce an amendment expanding the application of this Bill generally to the local authorities and specifically in this Part. I would prefer the general extension so that all the powers that go to the Director of Consumer Affairs for consumers should apply in respect of local authority activity and not only the additional protections in this Part dealing with mortgages.
This is a general observation made by Deputy Bruton. Indeed, he raised it in an earlier section. We had an interactive discussion at the time. Deputies Bruton and Rabbitte strongly supported local authorities being brought under the remit of the sections on housing and advertising. At that time, I promised that I would consult the Minister. Following that, the Minister wrote me a letter, a copy of which I sent to each Member. He stated:
"I want to emphasise that I share the wish of the committee and yourself that local authority mortgage borrowers should generally enjoy the same level of consumer protection as those with mortgages from the commercial lending agencies."
He also said:
"You can rest assured that I will take immediate steps, following the enactment of the Bill, to ensure that appropriate provisions of Part IX, as outlined in the briefing material already supplied, will be applied to local authority housing loans."
The Minister goes on to say that "it may well be possible to proceed before enactment of the Bill." Judging by the way we are proceeding, that might well be the case although that is no reflection on the committee; I am delighted we are proceeding slowly because it is the best way to deal with the Bill.
Deputy Bruton is right in a global sense by saying that all consumers wish to avail of a mortgage, from a building society, bank, mortgage intermediary or local authority. However, local authorities are not in the business of advancing loans to make money. The officials who carry out those duties are part of the wider public service. The local authorities get their money from the Department of the Environment but they are not in house loan business to make a profit. It is the uneveness of the playing field within which those who give mortgages for profit purposes — they are fully entitled to — and those who borrow from them, that make the provisions of the Bill mandatory. Local authorities pro bono publico, for the public good, are in that business. I am satisfied that the Minister for the Environment has been alerted about the committee’s concern, has responded very positively, and there will be a follow up. The official from the Department is present and will convey the views of the committee to the Minister.
This is the first occasion we have had a chance to comment on what the Minister for the Environment has conceded on the general exemptions under section 3. That section explicitly states that the Act would not apply to local authorities. We have the additional provisions that even mortgage protections for the consumer will not apply to local authority borrowers. The Minister is saying that local authorities are not profit-making and that is true, but we are not involved in setting out fair competition rules. This talk of level playing pitches can be taken too far. We are essentially talking about a consumer protection Bill and giving protection to consumers in very difficult cases — where the consumer believes that unfair terms have been imposed upon him — by permitting an approach to the Director of Consumer Affairs to highlight these unfair terms and, if necessary, having the Director take a court case on the consumer's behalf to assert the fairness of terms.
I am not so arrogant as to suggest that a local authority of which I am a member is beyond fault in this area. There have been cases where local authorities have made bad judgments. The consumer has a right to expect that the same provisions and protections will apply to a borrower from a local authority, a non-profit making institution, as to a profit-making one. The consumer is the minnow in this and the local authority is the strong partner. We should not deny the consumer access to the Director of Consumer Affairs and other protections with a legal underpinning. At the end of the day the Minister's regulations will not provide those protections.
I am concerned about any constraint being put on local authorities because, in many cases, if it was not for local authorities people would have no homes. Indeed, if the same criteria applied by building societies and banks were applied by local authorities there would be many people without a home today. I am concerned about putting too many constraints on local authorities because they need a degree of flexibility to deal with issues in a more humanitarian way than some of the financial institutions. They are able to take on board a number of issues which the building societies or banks would refuse to consider. They will also accept representations and advice from people like public representatives.
Which provision of this legislation would be too onerous for them to bear?
The Deputy is suggesting that, perhaps, the same criteria should be applied to them to level out the playing pitch.
No, that was to protect the consumer.
I am not sure that it would be in the consumer's interest in all cases that that pitch be levelled. Local authorities have acted fairly in many difficult cases throughout the years and I would not like to see any constraints put on them.
I do not see anything in this provision that is unduly onerous for local authorities to comply with. It is just normal good practice in dealing with consumers. The Minister has indicated that he is willing to extend that provision to local authorities in regard to valuation reports and the other protections for the consumer in relation to mortgages. Why is he willing to extend those provisions to them, but not the other provisions which are essentially protecting consumers? This is not imposing burdens on the local authority other than the burden of respecting the rights of the clients it deals with.
Perhaps we could look at it another way. It may be that I gabbled over the letter I received. First, there is this conflict and I can understand how it arises because the consumer issue is by its very nature an omnipresent one. Everyone is a consumer of something. The term dips in and out of the legislation of different Departments; for instance, transport directives are the concern of Minister Cowen and his officials while others, concerning health and food additives, come under consumer protection. I deal with those at the Consumer Affairs Council meetings in Brussels. Translated into national administrations they are dealt with by individual Departments.
We had this argument concerning the Minister for Justice and it was the committee's wish that I would supersede her powers, to take in this Bill the powers of the Department of Justice. However, it would not be possible for me to do so, no matter what my remit was. The same applies in this case.
I am not saying this because the Minister for the Environment and I are members of the same party but he has been very forthcoming on this Bill; initially, when I went to him about having housing included in the Bill, and, particularly, concerning local authority borrowers. I wish to quote the following from the Minister's letter to me:
I want to emphasise that I share the wish of the Committee and yourself that local authority mortgage borrowers should enjoy the same level of consumer protection as those with mortgages from the commercial lending agencies. You can rest assured that I will take immediate steps, following the enactment of your Bill, to ensure that appropriate provisions will be applied to local authority housing loans. Indeed, it may well be possible to proceed before enactment of the Bill.
Rather than being in conflict about this, the Department of the Environment is in agreement. It would not be possible for me, in this Bill, to reach into every Department and to take upon myself the powers vested in each Department. Rather I would seek for them to work with us on the Bill as, indeed, Minister Smith has done. It may be helpful, in this as in other matters to convey the wishes of the committee via the officials from the Department of the Environment to the Minister.
There is basically a difference of view and I suppose that we will return to this on Report Stage when dealing with the general exemption of the local authorities which is the one I am more concerned about. Looking at the limitations on the creditor's right of enforcement, and other provisions concerning the way consumers are dealt with, we would like to see local authorities — not only in respect of their housing loans, but also in respect of their unsecured loans which they occasionally make and which would not be mortgages — make the same rights available to consumers.
It would be interesting to hear why the Minister for the Environment is so fearful of the Director of Consumer Affairs being given an opportunity to hear of his stewardship of local authorities. As a member of Dublin Corporation, I would be quite happy to see the Director of Consumer Affairs pulling us up on practices which are perhaps inadvertantly unfair to consumers. Maybe, between this and Report Stage, the Minister will tell us what his fears are because I think they are groundless.
We will incorporate all that in a reply.
Question put and agreed to.