Dáil Éireann Debate, Wednesday - 30 April 2014
94. Deputy Pearse Doherty asked the Minister for Finance if his attention has been drawn to concerns raised by community groups such as active aging groups that the fees system operated by banks are causing great hindrance to their activities and can even threaten their sustainability; and if he will make a statement on the matter. [19397/14]
View answer95. Deputy Pearse Doherty asked the Minister for Finance the banking options available to small community groups who are facing great difficulty accessing banking services due to the fees structure employed by Irish banks; and if he will make a statement on the matter. [19398/14]
View answer97. Deputy Pearse Doherty asked the Minister for Finance the charities or community groups that can avail of free banking; and if he will make a statement on the matter. [19400/14]
View answerI propose to take Questions Nos. 94, 95 and 97 together.
I, as Minister for Finance, have no role in the regulation of bank charges. As the Deputy is aware, bank fees, charges and commissions are subject to regulation under Section 149 of the Consumer Credit Act 1995, as amended. Section 149 came into effect in 1996. Section 149 does not apply to interest rates; it applies to fees, charges and commissions only. Section 149 requires that credit institutions, prescribed credit institutions and bureaux de change must make a submission to the Central Bank if they wish to introduce any new customer charges or increase any existing customer charges in respect of certain services, such as:
- making and receiving payments,
- providing and granting credit, and
- maintaining and administrating transaction accounts
- providing foreign exchange.
The Central Bank may direct the institution not to impose the new or increased charge or it may approve the charge, or approve it at a lower level than requested by the institution. The Central Bank may exempt a credit institution from the obligation to make a notification for charges that are legitimately individually negotiated between the institution and the customer. Letters of Exemption are granted by the Central Bank, where certain requirements are met, which outline the qualifying conditions.
My Department recently published a review of the regulation of bank fees and charges which is available on the website www.finance.gov.ie. The review concluded that it would not be appropriate to repeal Section 149 at this time. The lack of competition in the banking sector means that the repeal of section 149 would give unfettered price setting power to the incumbent banks. The report recommends that this issue should be revisited when competition in the banking sector has improved significantly. It is my view that the current regulatory regime offers appropriate protection to consumers against unjustified increases in bank fees and commissions.
More generally, banks have adopted and implemented a variety of corporate social responsibility strategies and policies, which can include interaction withn community, sporting and charitable causes. However, I am not aware of individual banks' arrangements or policies in this area. It is advisable that all consumers shop around for banking products that best meet their needs. A Financial Product Comparison tool is available on the National Consumer Agency's website, www.nca.ie, which consumers may consult to compare current fees imposed by credit institutions for various financial services products. Individuals may also consult information leaflets available in bank branches.
All banks providing current accounts in Ireland are subject to the Central Bank's Current Account Switching Code, which is designed to make the process of switching current accounts easier and quicker and to offer protection and support for consumers when switching bank account. The Switching Code places obligations and time limits on both the old and the new bank when completing the switching process. Where accounts include credit facilities, such credit facilities will be subject to the credit assessment process applicable at the receiving bank.
