Dáil Éireann Debate, Wednesday - 20 November 2013
10. Deputy Thomas P. Broughan asked the Minister for Finance if the recently published guidelines for debt managers may be revised because of reported difficulties now being experienced by professionals advising clients on managing their debts in circumstances where they are not authorised by the Central Bank to act as debt management services; and if he will make a statement on the matter. [49229/13]
View answerThe relevant parts of the Central Bank (Supervision and Enforcement) Act 2013 commenced on 1 August 2013. This legislation provides a new regulatory regime for debt management firms under the Central Bank Act 1997. A debt management firm is defined as “a person who for remuneration provides debt management services to one or more consumers, other than an excepted person”. ‘Debt management services’ are defined in the legislation as:
(a) giving advice about the discharge of debts (in whole or in part), including advice about budgeting in connection with the discharge of debts,
(b) negotiating with a person’s creditors for the discharge of the person’s debts (in whole or in part), or
(c) any similar activity associated with the discharge of debts.
There has been some media coverage relating to the application of the Central Bank debt management rules to the Personal Insolvency Practitioners (PIPs) who will deal with the debt situation of indebted borrowers under the revised personal insolvency legislation. Under this legislation, the Insolvency Service of Ireland (ISI), an independent statutory body, was established by my colleague the Minister for Justice and Equality on 1 March, 2013. The ISI is mandated under the Personal Insolvency Act 2012 to authorise personal insolvency practitioners.
The ISI and PIPs fall within the definition of ‘excepted person’ under Section 28(f) of the Central Bank Act.
Under this section PIPs are exempted from regulation as a debt management firm when carrying out activities under the Personal Insolvency Act 2012. However if the activity provided by the PIP falls within the definition of ‘debt management services’ as set out in the Central Bank Act but falls outside the activities that the PIP is authorised to provide under the Act, then the PIP will require authorisation as a debt management firm.
It is a matter for each PIP to ensure that they have the appropriate authorisations for the services that they provide. I understand that the Central Bank and the Insolvency Service of Ireland have been in contact with some PIPs to clarify the situation regarding authorisation.
The ISI began authorising PIPs only in August this year. This process will continue and it is expected that a sufficient number of Practitioners will be authorised in due course so that a country wide network is available to insolvent debtors.
