Before proceeding with the business of the meeting, I wish to inform Members that, as chairman of the Select Committee, I have been invited to attend a conference on fisheries in Norway on 30 May. Do I have the committee's approval to attend? Is that agreed? Agreed. The Minister is available until 6 p.m., but I hope, with the co-operation of Members, that we will conclude the business of the meeting earlier.
Consumer Credit Bill, 1994: Committee Stage (Resumed).
Is the amendment to the amendment being pressed?
Yes. My amendment is in agreement with the measure I proposed to transfer the monitoring of bank transaction charges to the Director of Consumer Affairs. I agree with the £25,000 fee provided it is borne by the credit institution and not transferred to the customer. The £25,000 fee has been dressed up as a good thing for consumers, when it is absolutely the opposite. It is a double whammy. One will pay and be fleeced twice, the Minister has been transformed before our eyes from "Pat the punter's pal" to "Pat the banker's pal". This measure is on top of a Government which introduced——
Before we rehearse any more handy little syllogisms——
Deputy Rabbitte was good at it himself.
As I understood it, and the minutes record, we concluded the last day on the basis that I was replying to the debate. I listened to several interventions from Deputy O'Rourke, all of which I enjoyed.
I was about to correct the situation. I intended to ask the Minister if he wished to reply to the amendment to the amendment. I understand the Minister replies——
Yes, he asked me to move my amendment.
I was coming to that, if the Deputy would allow me to conduct the business.
Yes, but you asked me to move my amendment.
I did not. I asked if the amendment was being pressed?
Yes, exactly.
The Minister replied to the composite amendment, so I now ask him to reply to the amendment to the amendment. I will then call a vote.
I will be brief. As I understand it, Deputy O'Rourke will support the amendment if I can assure her that the fee will not be passed on to the consumer. I compliment Deputy O'Rourke who, as Minister, responded to pressure from Opposition Deputies at the time to bring forward this amendment. She won the battle with her colleagues on this matter. I have tried to give the amendment some teeth and I am disappointed in that context that Deputy O'Rourke should suddenly withdraw her support merely because I tried to make the amendment meaningful.
I cannot see any merit in the argument being advanced. Several irrelevant comments were made about the budget. The minutes of the last meeting show that Deputy O'Rourke dealt at some length with the abolition of the bank levy but she must know that the Fianna Fáil-Progressive Democrats Government abolished it in 1992.
On a point of information, I did not mention the bank levy last week.
I will take a point of order if it is genuine but not persistent interruptions.
On a point of information, I did not mention the bank levy.
There is no provision in Standing Orders for points of information.
Deputy McDowell raised the question of opposition in principle. His argument was that the Government was not prepared to fund this watchdog, as he put it, and that it was ridiculous and absurd that the Government should seek to levy a contribution towards the functioning of the office of the Director of Consumer Affairs to monitor the banks. I am appalled that Deputy McDowell takes this line given his party's position on taxation. Is he proposing that the only alternative is to fund it with taxpayers' money? I can hardly believe that is what Deputy McDowell wants.
To suggest it is somehow wrong in principle for the Government to seek to levy a contribution from the financial institutions is nonsense. How, for example, would the planning system work if, when planning permissions are being considered by local authorities, in all cases there was not an expectation of a fee, even if it is as small as building an extension to a house? Why, if it is good enough for the planning system, is it not good enough for the banking system? For example, the NSAI levies a fee of £2,100 for validating the ISO for companies and has an annual review fee of £1,700 to review that accreditation.
I find it very difficult to follow Deputy McDowell. The Companies Office will charge £165 if one wants to do the paperwork for a new company and that contribution is towards the cost of doing one's business. I cannot see any merit in the argument advanced that it is wrong for the Government to impose a levy as a contribution towards the onerous additional duties the Director of Consumer Affairs will be taking on.
Deputy O'Rourke, who has forgotten that she dealt with bank levies the last day, said during a sequence of interventions while Deputy Sheehan was speaking that the levy on the banks was removed.
May I quote from the Minister's contribution of February 1995?
I have to have regard for the facts and they are as I spelled them out. I regret there is any ambivalence on the part of Fianna Fáil in trying to do something about the level of bank charges. Whether one talks to small business or private bank customers, the view is, as Deputy Ring pointed out in his contribution on the last occasion, that small businesses and private customers are being seriously penalised by the banks.
Since this matter became public there has been a stream of complaints to the Department, from small business more than private customers, instancing exchanges and business with the banks and complaints about the number of bank charges, the frequency of increases and so on. It makes eminent good sense to take a consumer's stand on this for a change and to transfer the monitoring of these bank charges and their amount and size to the Director of Consumer Affairs.
Deputy O'Rourke's concerns are provided for in the amendment, where the Director of Consumer Affairs is required to take into account the question Deputy O'Rourke raises in respect of whether, in his opinion, the charge is likely to be passed on to the customer. He will then make a decision, based on that, whether to allow the charge. The significance is that the banks will have to justify their applications for new increases or charges to the Director of Consumer Affairs. That is as it should be.
It is an onerous duty that will require additional staff and expertise. In the context of the four major banks returning profits in excess of £600 million per annum this is a very modest charge as a contribution towards the additional costs of the Director of Consumer Affairs. If it has the additional benefit of causing the banks to think twice before rushing in for new charges or for increases in charges, that is all the better. I would like to think it would have that effect. I would like to press the amendment and perhaps we could make some progress.
Is the amendment to the amendment being pressed?
Yes. I am quoting from the Dáil report of February 1995 where Deputy Rabbitte said "Banks hold a special place; we cannot do without them in our personal and business lives; they are very important to us all". The Minister of State, Deputy Rabbitte has sought to draw a veil over what he is doing, which is profoundly anti-consumer.
I have a reasonable amendment which states: "Provided that such fee is to be borne by the credit institution and not transferred in any fashion to the customer." In the earlier discussions on this Bill I accepted so many amendments from the Minister that I get dizzy thinking about it. Yet, he is not prepared to adopt an amendment he says is reasonable, proper and right. If it is, why does the Minister not want consumers to be shielded from having to pay the £25,000? This is a "double whammy"— one will be paying double to be fleeced. I never heard such a fantistic fairy story in my life. It is a new concept — one pays to be fleeced.
The Minister was the punter's friend, but now he is the banker's friend. The £25,000 will be passed on to the customers every time it is imposed on the bank, whether it be in interest margins or hidden charges.
I am sorry to interrupt the Deputy, but she is only saying what she already said on the last day.
The Minister is trying to recover what he did in the budget to the banks.
I think I have given you a fair crack of the whip.
Pat the punter's friend has been transformed into Pat the banker's friend.
This is the most absurd amendment which has ever come before the House. We are talking about small businesses. The problem is value for money. I understand banks have a total of 42 charges in place. They will easily find compensation for the £25,000 charge when they seek a mandate from the Office of the Director of Consumer Affairs to get an increase. Small business people will pay the increase because banks, by and large, are in the business of making money. I am appalled that the Minister for Consumer Affairs, as he calls himself, should table such an amendment. One must look at the structure of banks. Approximately 70 per cent of adults have bank accounts. Only a small number of people will pay that £25,000, which is totally unnecessary. The Minister referred to planning and ISO 9000, which is not relevant.
Those points were made at the last meeting, but Deputy O'Keeffe was not present for that discussion.
He points to the bank levy — the £12 million which this Government gave back to the bankers.
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Tá |
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Byrne, Hugh |
Nolan, M. J. |
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Callely, Ivor |
O'Keeffe, Ned |
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Kitt, Tom |
O'Rourke, Mary |
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Moynihan, Donal |
Power, Seán |
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Níl |
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Bell, Michael |
Costello, Joe |
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Boylan, Andrew |
Crowley, Frank |
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Broughan, Tommy |
Fitzgerald, Brian |
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Browne, John (Carlow-Kilkenny) |
Rabbitte, Pat |
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Burke, Liam |
Ring, Michael |
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Byrne, Eric |
Sheehan, P. J. |
I move amendment No.300:
In page 62, before section 120, but in Part X, to insert the following new section:
"PART XI
Moneylenders, Credit and Mortgage Intermediaries Registers
120.—(1) The Director shall cause to be established and kept the following registers——
(a) the moneylenders register of all licences granted under section 81 (1),
(b) the credit intermediaries register of all authorisations granted under section 8 (1),
(c) the mortgage intermediaries register of all authorisations granted under section 97 (1).
(2) Each of the registers shall be in such form as the Director may from time to time decide.
(3) The moneylenders register shall contain the following particulars—
(a) the information referred to in section 81 (7),
(b) any revocation, suspension or variation of the terms or conditions of a moneylenders licence, and
(c) such other particulars as the Minister may from time to time prescribe.
(4) The credit intermediaries register shall contain the following particulars—
(a) the information referred to in section 8 (5),
(b) the name of each undertaking for which the holder of an authorisation under section 8 (1) is a credit intermediary, and
(c) such other particulars as the Minister may from time to time prescribe.
(5) The mortgage intermediaries register shall contain the following particulars—
(a) the information referred to in section 97 (6),
(b) the name of each undertaking for which the holder of an authorisation under section 97 (1) is a mortgage intermediary, and
(c) such other particulars as the Minister, after consultation with the Minister for the Environment may from time to time prescribe.
(6) A person shall at all reasonable times be entitled to make enquiries regarding the contents of any of the registers.
(7) The registers shall at all reasonable times be open to inspection by any person on payment of a fee of such amount (if any) as may from time to time be prescribed.
(8) (a) A person shall be entitled to obtain a copy of or an extract from (including in the case of information in non-legible form, a copy of or extract from such an entry in permanent legible form) an entry in any of the registers on payment to the Director of a fee of not more than £5, or such other amount (if any) as may from time to time be prescribed.
(b) The fee referred to in paragraph (a) may be waived or reduced by the Director, at his discretion, in respect of such class or classes of persons as he may decide.
(9) Every document purporting to be a copy of or extract from an entry in any of the registers and purporting to be certified by an officer of the Director to be a true copy of or an extract from such entry shall, without proof of the signature of the officer purporting so to certify or that the person was such officer, be received in evidence in any legal proceedings and shall, until the contrary is shown, be deemed to be a true copy of or extract from such entry and be evidence of the terms of such entry.
(10) In this section ‘the registers' means the registers established under this section.".
The purpose of this amendment is to provide for the opening and maintenance by the Director of registers containing information on all moneylending licences and credit and mortgage intermediary authorisations issued. It also provides that the public shall have access to such registers and be enabled to take copies or extracts on payment of a fee which shall not, in any case, exceed £5. The Director shall have discretion in waiving such fees in cases of hardship or need.
This amendment came about as a result of experiences of the Office of the Revenue Commissioners. Under the provisions of the Data Protection Act, that office cannot disclose information on individual moneylenders licensed by the Revenue Commissioners. The Director of Consumer Affairs also expressed interest in setting up public registers.
Is the Minister saying that members of the public can have access to these public registers on payment of a particular fee?
If they want an extract from it or information.
Is this for members of the public to make such an application with reference to his or her own business or can a member of the public go in and on payment of the £5 fee seek information about anybody else's business?
Yes, it is public information. Anybody can access any information contained on that file on payment of £5. The reason for the minimal fee is to discourage frivolous applications.
The fee of £5 is modest considering the Minister has clamped £25,000 on the consumers. Could the Minister explain the considerations of the Data Protection Act to which he referred?
The only reference to the Data Protection Act is the particular legislation which governs that Act and access to it. For example, some of this information could, if express provision is not made for the opening and maintenance of public registers, be kept on computer and the terms of the Data Protection Act would apply. it is considered both necessary and desirable to make separate provision to open public registers and to maintain them up to date in respect of both the credit intermediaries and the moneylending licences. Any member of the public on payment of the fee is entitled to get information. There will not be any information on them except—
Names and addresses and date of registration.
Names and addresses of those who have the licences and who are authorised credit intermediaries.
Is it the intention of the Director of Consumer Affairs that those registers will be updated annually?
It says "maintained", that would be to keep them in a reasonably up-to-date condition. I do not know and I am not sure if he knows.
He would know because the moneylenders must apply for their fee annually, so clearly it would have to be annually.
The number of moneylenders is relatively small and a change of application would probably be automatically recorded on the register by the Director.
I move amendment No. 301:
In page 62, before section 120, but in Part XI, to insert the following new section:
"120.—The Act of 1980 is hereby amended—
(a) by the insertion after the definition of ‘business' in section 2 (1) of the following definition:
‘"consumer hire agreement" has the meaning assigned to it by section 2 (1) of the Consumer Credit Act, 1994;',
(b) by the substitution for the definition of ‘hire-purchase agreement' in section 2 (1) of the following definition:
‘"hire-purchase agreement" has the meaning assigned to it by section 2 (1) of the Consumer Credit Act, 1994;', and
(c) by the insertion in section 54 after ‘hire-purchase agreement' of ‘or a consumer hire agreement'.".
This amendment provides for the amendment of the Sale of Goods and Supply of Services Act, 1980, by first inserting in that Act a definition of "consumer hire agreement" in line with the definition contained in this Bill and, secondly, by redefining the definition of "hire purchase agreement" used in the 1980 Act, again in line with the definition contained in section 2 of this Bill. Also, the insertion in section 54 which allows for a ministerial order to provide that certain contracts be in writing, an exclusion for consumer hire agreements which must under the provisions of this Bill be made in writing. The amendment suggested by the draftsman seeks to avoid any conflict of law between the consumer credit legislation and the earlier Sale of Goods and Supply of Services Act, 1980.
We discussed that and it seems to be the sensible way of doing it.
Acceptance of this amendment involves the deletion of section 120 of the Bill.
I move amendment No. 302:
In page 79, column (3), opposite the reference in column (2) to "Sale of Goods and Supply of Services Act, 1980", to delete "Section 14 and Part III (sections 25 to 38)" and substitute "Part III (sections 25 to 38) and section 50".
When the Bill was published it was intended that sections 38 and 39 would give effect to the provisions of the 1987 EU Directive relating to the liability of providers of credit with regard to goods and services, while at the same time repealing the provisions of section 14 of the Sale of Goods and Supply of Services Act, 1980. The acceptance earlier of amendment No. 119 inserting a new text of section 38 means that the existing provisions of section 14 of the Sale of Goods and Supply of Services Act are being retained. Accordingly, the reference to the repeal of section 14 in the Second Schedule is now being deleted. This, again, is on the advice of the parliamentary draftsman. I am also proposing the deletion of section 50 of the 1980 Act to avoid any conflict of law.
It is a textual amendment because of decisions taken in the earlier parts of the Bill.
Amendment No. 303 has already been discussed with amendment No. 299.
I move amendment No. 303:
In page 79, after the row relating to "Sale of Goods and Supply of Services Act, 1980" to insert the following:
"
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1989, No. 16 |
Central Bank Act, 1989 |
Sections 28 and 136. |
"
I move amendment No. 304:
In page 80, Part II, between rows 7 and 8, to insert the following:
"8. Amount of endowment premium* (if applicable):
£.................................................
9. Amount of mortgage protection premium* (if applicable):
£.................................................
The purpose of the amendment is to provide necessary information to the consumer with regard to the premia which are payable in respect of an endowment policy or a mortgage protection policy where such payment is applicable. Without this information the Schedule would not be complete in respect of the outgoings which a borrower must meet in order to comply with the mortgage contract.
Will the Minister advise if the composite amount of information, whatever it was, required to be given to the would be purchaser of that credit purchase would have been included in any event, given that the earlier Schedule would have required that the amount of the endowment premium, if applicable, and the amount of the mortgage protection premium, if applicable, would have been included?
We are being more explicit in this instance in singling out an additional two lines, one which would indicate the amount of the endowment premium separately, and the other which would indicate if there is a mortgage protection premium.
Is a mortgage protection premium not now compulsory on all mortgages?
That is correct. Part II, page 80, sets out in diagram form what the front page of the housing loan will look like.
That is what I was referring to.
This merely makes explicit provision for endowment and mortgage protection respectively.
The difficulty I have with the words "if applicable" with regard to the amount of mortgage protection premium in that it would raise a doubt that there was not a need for a mortgage protection premium when it is now required that a mortgage protection policy be taken out with a mortgage. I understand that legislation to this effect was introduced by the Department of the Environment.
We are at cross purposes on this. The words "if applicable" in both cases refer to the presumption that an endowment mortgage is being taken out. However, the mortgage taken out could be an annuity mortgage in which case it does not apply.
Will the Minister confirm this on Report Stage?
I will do so.
Is it not the choice of the borrower as to whether to take out an endowment mortgage or not?
Yes.
Is a choice available in this instance?
Absolutely, and this does not take away that choice.
Is the Minister attempting to make clear, therefore, that the necessary information will be made available to the consumer and that he will not be led up the garden path?
Yes.
This is a matter which can be clarified on Report Stage.
I move amendment No. 305:
In page 82, Part I, row 4, to delete the following:
"
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Section 15 |
The deletion of that section." |
"
The purpose in amending the Pawnbrokers Act, 1964 is to ensure that the provisions of the EU Directives on consumer credit also apply to pawnbrokers. Originally it was thought necessary to delete section 15 of that Act, but after the Bill was published the Irish Pawnbrokers Association represented that difficulties would arise in their normal day to day transactions if section 15 were to be repealed. Following consultation with the Department of Justice, I have decided that it would not be appropriate to proceed with the repeal. Section 15 of this Act provides that pawnbrokers may make special contracts with the pawnor in respect of a pledge in which the pawnbroker makes a loan of more than £10.
I had contacted the Department of Justice on this matter. Are the Minister's views jointly held by his Department and the Department of Justice or did the Minister hear from the Department of Justice on this matter?
The Department of Justice tends to bear out the view represented by the Irish Pawnborkers Association.
Are the Ministers in tandem on that point of view?
There appears to be a necessity to update the pawnbrokers legislation, but that is a matter for my colleague in the Department of Justice.
That is the point I was making in my questioning.
The legislation needs to be updated, but it is not a matter that falls within the remit of my Department.
However, the Minister will recall that when he sat on the Opposition benches he pressed me mightily on this matter and I advised him that I had made representations to the then Minister for Justice, Deputy Geoghegan-Quinn. Has the Minister made representations to the current Minister for Justice, Deputy Owen?
The mention of all those names would not do me any good if I said it was with the Attorney General.
It is not just an academic matter. It is clear that the Pawnbrokers Act, 1964 requires updating, but this is not being done. The Department of Justice is dragging its heels on the matter, as I considered it to be doing some months ago. I undertook to press the Department of Justice on this matter, because it is inextricably linked with consumers and the Bill, and this is reflected in the fact that the Minister had to introduce this amendment to make it relevant. I hope the Minister will continue to press the Minister for Justice, deputy Owen.
I ask the Minister to take a note of that point.
What role will Mr. Fagan play if a customer of a pawnbroker makes a complaint about a purchase and the response is not satisfactory? What protection is there for the ordinary person in the street? Pawnbrokers can have very substantial dealings in terms of gold chains and many items of jewellery, household goods, furnishings and so on. Often such difficulties arise, as the Minister will be aware from his work as a Deputy, and people have no come back. What protection is afforded to them in the Bill?
The question of the legislation, which is indisputably out of date, is a matter for the Department of Justice. I have had discussions with the Department of Justice and we referred the Irish Pawnbrokers Association to make their case to that Department. We may introduce further regulation on Report Stage. It is not difficult to understand why, back in 1964, this was a matter for the Department of Justice. In any event, we have referred the Irish Pawnbrokers Association to that Department, first, because pawnbrokers are regrettably a dying breed, and second, the legislation in terms of thresholds and so on is badly out of date.
They are not a dying breed in this city. Their numbers are substantial and some of them are not many streets from here. Any consumer protection has to be broad based and I cannot see how the Minister can omit one sector, especially as this can be a very dangerous sector where exploitation can arise.
It is a matter for the Department of Justice. The Minister has indicated that he will take into consideration the points that both you and Deputy O'Rourke have made and if any information arises he will address it on Report Stage.
I move amendment No. 306:
In page 83, Part I, column (2), opposite the row relating to "Section 47 (3) (a)", to delete the last three lines of the row and substitute the following:
"‘48. The annual percentage rate of charge ("APR") shall be calculated in accordance with the Fourth Schedule to the Consumer Credit Act, 1994, or such other method of calculation as the Minister for Enterprise and Employment may specify in regulations made under that Act.'.".
The purpose of the amendment is to ensure that whatever amendment may be made in the future to the method of calculation of APR specified in ministerial regulation under this legislation shall also apply to the APR with regard to loans made by pawnbrokers.
I agree with Deputy O'Keeffe on this issue. It is like the point raised during the discussions on housing loans and the exclusion of local authority mortgages. This is something my predecessor agreed to consider on Report Stage and I vindicate that commitment. The pawnbrokers legislation is a matter for the Department of Justice and it is a matter of history as to why it is reposed there. The Garda Síochána is the enforcement agency and it will be interesting to see what the Department of Justice will advise us on this matter. I have no objection to it being included in the remit of the Bill.
Will it only be a facility for pawnbrokers?
No. The APR applying to credit institutions which is in the Consumer Credit Bill, 1994, will also apply to pawnbrokers' transactions.
Different institutions will not quote the same rate. Every institution will have a different figure in a particular year, although the APR may be the same. It depends on how the calculations are done because there may be a big margin. What type of protection will be provided?
That is where the banks will hide their £25,000.
We are repeating ourselves.
We are not repeating ourselves.
That is the second time the Minister made the same reply.
It is repetitious.
I do not want to fight with you, Chairman, and I am friendly with you, but you are not being fair.
I distrust any conversation which includes, "I am friendly with you".
I tried on two occasions to put the amendment. The Minister has repeated what he said previously. I am trying to facilitate Deputy O'Rourke who wants to get back to the House for business.
If an intelligent person wants to borrow from a bank — the APR does not mean anything to them — they will go to three banks and get three quotations. They will ask what the roll over is at the end of 12 months on a £1,000 loan. They will find that there is £3,000 in the difference.
I ask the Minister for his interpretation of APR.
It is represented mathematically in the Bill. This is a repeat of the debate we had when the then Minister started her contribution by saying: "I do not understand this; does anybody else around the table?".
I am asking the Minister now.
Everybody agreed they did not understand it. For anyone who understands algebra — I refer Deputy N. O'Keeffe to it — there is an algebraic formula on page 81.
Does the Minister understand it?
I do not understand algebra.
Good.
Deputy N. O'Keeffe raises a serious point which we are looking at for Report Stage. I do not believe that 0.1 per cent of consumers understand the term APR. The last day I referred to a submission I received which sets out in detail the concept of APR and how it can be manipulated to the advantage of the lender as compared to the consumer. We are seeking to give expression in some intelligible form to what APR represents. For example, it has been stated that it should be expressed in financial terms as a figure, 100 or 1,000, so that people can relate to it. People cannot relate to an expression of 40 per cent over three years. Deputy O'Rourke can confirm that we already considered this, but we were not successful in making it more intelligible.
The protections in this Bill will give the consumer a power which he or she could not have contemplated before and the Director of Consumer Affairs also has specific responsibility under the Bill. I agree it is difficult to define APR and its consistent use by the institutions.
The institutions advertise on the television or radio and then an authoritative voice at the end of the advertisement states that the APR is a certain figure. One is meant to feel that everything is all right because the APR is stated — they must state it — but the majority of people do not know what the APR means. They are lulled into feeling it is a good product, institution or item to buy because the APR is quoted in a male authoritive voice at the end of the advertisement. The APR is a fig leaf for other things which are taking place alongside the sales of various credit products which the APR covers. The meaning of APR is not clear to the ordinary punter. I look forward to Report Stage when I hope it will be possible to define the meaning of Annual Percentage Rate.
Many small consumers will become tied up in this issue. If an ordinary consumer gets bank quotations, he will accept the lowest one, but that does not mean it is the cheapest. I am trying to put something in place to protect the small consumer. The larger consumers will always do their business properly. However, if one gets three different interest rates from three banks, one will find that the cheapest will have the highest role over at the end of the year when it accumulates. If the Minister asked these three banks what the role over would be at the end of 12 months on a loan of £1,000, he would find——
That point has been made and the Minister indicated he would look at it and come back with an explanation before Report Stage.
That is not what I said. We are not looking for an explanation, but the ability to express what is included in the term Annual Percentage Rate of charge because that is the conventional description. Deputy O'Keeffe is saying that because a certain institution is offering a lower rate of APR on a particular loan, that does not necessarily mean that over the duration of that loan the consumer has done better with that institution than if he had shopped around and got a higher APR on a differently structured loan. This amendment is making the definition of APR in any future changes consistent with what is in the Schedule to this Act and with what would apply in the case of loans made by pawnbrokers. It has no wider significance than to bring it into line and make it consistent with pawnbrokers' rates. Deputy O'Keeffe's point would be more appropriately addressed at an earlier stage of the Bill.
It would not be possible for this Department to change the concept of APR if we did not have financial backing and it would become common in the marketplace. We could not have a situation where one set of consumers are expected to go by the yardstick of APR and make judgments on that basis, while a different set of consumers are expected to make an assessment and a judgment on a different method of calculation.
Would it not be a worthwhile task for the Director of Consumer Affairs to apply himself to a common understanding of the term APR as it is applied by financial institutions? It would be a good idea for him to consider this matter.
Annual Percentage Rate is a grossing of the fixed rate.
They are hiding under it.
I move amendment No. 307:
In page 8, line 6, to delete "AND HIRING" and substitute", HIRING AND MONEYLENDING".
The reference to moneylending was omitted in error from the Long Title of the Bill. This amendment corrects that error and has the effect of extending the scope of the Long Title of the Bill to cover moneylending.
I move amendment No. 308:
In page 8, line 8 to delete "SEPTEMBER" and substitute "DECEMBER".
This is a textual amendment to correct a typographical error. The correct date of the Council Directive is December, not September.
I move amendment No. 309:
In page 8, line 11, after "1980," to insert "AND".
This is a textual amendment to correct the omission of the word "and".
I move amendment No. 310:
In page 8, line 14 after "1980," to insert "TO PROVIDE THAT THE DIRECTOR OF CONSUMER AFFAIRS SHALL MONITOR ALL CUSTOMER CHARGES BY CREDIT INSTITUTIONS AND FOR THAT PURPOSE TO REPEAL SECTION 28 OF THE CENTRAL BANK ACT, 1989,".
On Report Stage I shall return to various issues which my predecessor undertook to examine arising from the committee's deliberations. Other provisions also require amendment, which will be tabled on Report Stage. I am referring specifically to definitions of credit agreements, credit institutions, moneylenders and money lending agreements; the reinstatement of the powers of the Director of Consumer Affairs to seek a High Court declaration under section 46 that any change provided for in a credit agreement is excessive; the deletion of section 48 of the Bill relating to unfair terms in credit agreements consequent upon the transposition into Irish law of the EU Directive on unfair contract terms — all unfair terms in consumer contracts are outlawed from 31 December 1994; the alignment of the provisions in section 8 relating to the credit intermediaries, provisions in sectin 81 relating to moneylenders, provisions in section 97 relating to mortgage intermediaries and the amendment of the relevant provisions concerning tax clearance certificates and Parts VI and VII regarding hire purchase and consumer hire agreements.
Further amendments are required to the pawnbroking legislation in section 112 of the Sixth Schedule as a result of discussions between the industry and the Department of Justice. As a result of amendments accepted on Committee Stage a number of consequential technical and textual amendments must be tabled by me on Report Stage when I shall also revert to the definition of the total cost of credit and its now more common designation, APR.
I am sorry the Minister succumbed to the ministrations of the Department of Finance with regard to the removal of the terms of credit arrangements. I will put forward on Report Stage the amendment the Deputy previously proposed to me which he now seeks to delete.
If Deputy O'Rourke persists in putting down amendments on the unfair terms of contract, she will be wasting her valuable time. The matter has already been provided for by a European Directive——
Not by legislation.
It was signed into law by the Minister, Deputy Richard Bruton, and takes effect from 31 December. Accordingly, there is no requirement for the measure to which Deputy O'Rourke referred.
I shall merely couch it in the Minister's own words.
It applies to the banks and financial institutions and is already law.
I will couch the amendment in the Minister's words from the Official Report.
I allowed the introduction of subject matter which is more appropriate to Report Stage.
The Minister will be humiliated when I put it in his own words.
I thank the Minister, his staff and all my colleagues who contributed to an excellent debate.
When will the committee meet again?
I will consult the convenors. I wish to record our thanks to the Oireachtas staff who helped us to deal with this Bill in advance of the time schedule.
I propose the following draft report:
The Select Committee has considered the Bill and has made amendments thereto. The Bill, as amended, is reported to the Dáil.
Is that agreed?
Report agreed to.
Ordered to report to the Dáil accordingly.
The Select Committee adjourned at 4.10 p.m.
