Terence Flanagan
Question:104. Deputy Terence Flanagan asked the Minister for Finance his views on overcharging of customers by Ulster Bank; and if he will make a statement on the matter. [55012/13]
View answerThursday, 19 December 2013
Questions (104)
Written answers
I assume that the Deputy is referring to recent media reports on allegations of overcharging of Ulster Bank business customers in Ireland. I understand that RBS, the parent of Ulster Bank, has appointed Clifford Chance to independently review the treatment of distressed customers by the Global Restructuring Group and report early in the New Year. I also understand that the findings will be applied across the RBS Group.
I would refer the Deputy to the revised Code of Conduct for Business Lending to SMEs, which came into effect on 1 January 2012. A specific focus of the Code is the treatment of borrowers in financial difficulties. Lenders are required to provide information to SMEs in relation to the importance of engaging with the lender to address their financial difficulties, the procedures for dealing with SMEs in financial difficulties including timeframes, details of fees which may apply, the type of information they require in assessing cases and information on their right of appeal. Lenders must assess whether an alternative repayment arrangement can be put in place and allow the SME appeal that decision and offer meetings to SMEs which approach them with concerns about meeting repayments.
The banks are required to comply with the Code as a matter of law. The Code makes it clear that anybody acting for or on behalf of a bank is subject to its provisions. The Central Bank can invoke its statutory powers to require compliance with the Code. A breach of the Code is a breach of a regulatory requirement and may be the subject of enforcement action by the Central Bank.
Additionally, as the Deputy is aware, the two main banks are subject to oversight by the Credit Review Office and the CRO has been active in overturning rejections by the banks of credit applications from the SME sector.
It is the customer’s decision to take legal action against their bank. However, I would state that should any customer of a bank operating in Ireland be unable to resolve a complaint about the operation of his or her accounts they may refer the matter to the Financial Services Ombudsman.
The Deputy can be assured that this is an area that I will keep under review given the importance of the SME sector to fostering and supporting economic recovery.