Written Answers Nos. 90-99
90. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 81 of 12 February 2015, if his reply that the projected structural deficit for 2015 is above the headline deficit indicates that the economy is operating above its trend line, with negative spare capacity; his estimate of the equilibrium level of unemployment, based on the current structural deficit; and if he will make a statement on the matter. [9833/15]
View answerEstimates of the structural budgetary position published in Budget 2015 were produced on the basis of the harmonised methodology for calculating the output gap.
The harmonised methodology suggests a positive output gap in 2015, in other words that the economy is operating above its potential. The harmonised method also suggests an equilibrium unemployment rate of around 10 per cent.
These results are not consistent with other measures of the business cycle in Ireland, and my Department has repeatedly pointed out the shortcomings associated with the harmonised approach. Other Member States have similar issues.
On foot of this, my officials are actively pursuing improvements in the harmonised methodology at EU level.
91. Deputy Michael McGrath asked the Minister for Finance his views on requiring banks to provide more information as to why lending applications are declined; and if he will make a statement on the matter. [9834/15]
View answerAs the Deputy is aware, I have no direct function in the relationship between banks and their customers or in the day-to-day commercial and operational decisions of the banks. These decisions are taken by the board and management of the institutions.
In relation to the requirement for lenders to provide more information as to why lending applications are declined, I am informed by the Central Bank that there are a number of measures in place in this regard:
Consumer Credit Act 1995
Section 142 of the Consumer Credit Act 1995 provides, subject to specified exceptions, as follows:
Where a creditor or an owner refuses to enter into an agreement with a consumer, he shall disclose to the consumer the name and address of any person from whom he sought information concerning the financial standing of the consumer who gave information which influenced the refusal, within 14 days after receiving a request in writing to that effect from the consumer.
European Communities (Consumer Credit Agreements) Regulations 2010
Part 3 of the European Communities (Consumer Credit Agreements) Regulations 2010, which apply to the provision of credit for amounts between €200 and €75,000 (excluding mortgages) sets out the following requirement:-
12.(1) Subject to paragraph (2), if a consumer's credit application is rejected on the basis of the consultation of a database, the creditor concerned shall inform the consumer immediately and without charge of the result of the consultation and of the particulars of the database consulted.
(2) The information need not be provided if the provision of it is prohibited by another law or is contrary to objectives of public policy or public security.
(3) This Regulation is without prejudice to the application of the Data Protection Acts 1988 and 2003.
(4) A creditor or credit intermediary that contravenes a provision of this Regulation commits an offence.
Consumer Protection Code 2012 (the CPC 2012)
Provision 4.24 of the CPC 2012 requires that where a formal application for credit is turned down by a regulated entity, the regulated entity must clearly outline to the personal consumer the reasons why the credit was not approved. The regulated entity must also offer to provide the reasons on paper or another durable medium to the personal consumer and do so, if requested. This provision of the CPC 2012 does not apply to the provision of credit under credit agreements which fall within the scope of European Communities (Consumer Credit Agreements) Regulations 2010.
Code of Conduct for Business Lending to Small and Medium Enterprises 2012 (the SME Code)
Provision 12 of the SME Code requires that '[w]here an application for credit is declined, the regulated entity must explain clearly to the borrower the reason(s) why the credit facility was declined'.
The Central Bank issued a public consultation on 11 January 2015 on the Review of the Code of Conduct for Business Lending to Small and Medium Enterprises which included a set of proposed regulations:
http://www.centralbank.ie/regulation/poldocs/consultation-papers/Documents/CP91%20Review%20of%20the%20Code%20of%20Conduct%20for%20Business%20Lending%20to%20Small%20and%20Medium%20Enterprises/Review%20of%20the%20Code%20of%20Conduct%20for%20Business%20Lending%20to%20Small%20and%20Medium%20Enterprises.pdf.
As part of the review, the Central Bank is proposing to strengthen the protections available to SMEs in a number of areas, including:
- requiring lenders to provide information on the application process and associated timelines;
- introducing requirements to assess affordability;
- requiring lenders to provide reasons in writing for declining credit that are specific to the application (or part thereof) that was declined;
- expanding the appeals provisions to include decisions on declining or withdrawing credit and decisions regarding terms and conditions; and
- requiring lenders to provide information to the customer about:
- Government supports available from or through the lender,
- the lender's appeals process and the role of the Credit Review Office (where relevant), and
- the complaints process including, where relevant, to the Financial Services Ombudsman (FSO).
Regulation 13(1) of the proposed Regulations to replace the existing SME Code would expand the existing requirement as regards declined applications for credit by SMEs:
1. If a lender is refusing a credit application, the lender shall provide the borrower with at least the following information:
(a) an explanation of the reason(s) why the application for credit was refused. The explanation provided shall:
1. be clear and comprehensible,
2. identify the application (or part thereof) that was refused, and
3. be specific to the borrower's application (or part thereof),
(b) information on the lender's internal appeals procedure established pursuant to Regulation 21 and information on how to appeal a decision by the lender to refuse an application for credit,
(c) where the lender's decisions are subject to review by the Credit Review Office, information about the role of the Credit Review Office and the contact details for the Credit Review Office,
(d) information about any other supports available from or through the lender, which may include relevant Government support schemes, and
(e) information about the borrower's right to make a complaint under the lender's complaints procedure established pursuant to Regulation 22.
The proposed regulations would require that the explanation given to borrowers would be clear and comprehensible and be specifically related to a borrower's application. Further, as part of the refusal notification, a lender would be required under the proposed regulations to provide information to borrowers on the lender's internal appeals procedure, the Credit Review Office (where applicable), other support available from or through the lender and the borrowers right to make a complaint under the regulations. These requirements are not currently in place under the existing SME Code.
In addition, provision 24 of the proposed Regulations requires that 'the lender shall provide any information or explanation required to be made to a borrower or a person providing security pursuant to these Regulations in a durable medium'.
The consultation period will end on 13 April 2015 at which point the responses received will be considered and revisions made to the proposed Regulations, as appropriate.
92. Deputy Michael McGrath asked the Minister for Finance if the Revenue Commissioners are conducting a dedicated investigation of taxation issues relating to hospital consultants who have income from both public and private practice; and if he will make a statement on the matter. [9835/15]
View answerI am advised by the Revenue Commissioners that they are engaged in an ongoing programme of compliance work in relation to medical consultants. Revenue's main focus at this time in the context of this programme is the tax issues arising from the incorporation of medical consultants' businesses.
To date, Revenue has opened a total of 331 compliance interventions. Some 128 of the interventions have been concluded, which has resulted in the collection of €19,199,325 in tax, late payment interest charges and penalties.
93. Deputy Michael McGrath asked the Minister for Finance the number of State agencies and public bodies, including third level institutions, that have made settlements with the Revenue Commissioners since 2011; and if he will make a statement on the matter. [9836/15]
View answerI am informed by the Revenue Commissioners that as they categorise taxpayers on the basis of the internationally accepted standard economic activity NACE Code, it is not possible without extensive examination of Revenue records to provide the information in the detail requested by the Deputy.
I am advised by Revenue cases are selected for compliance intervention by them having regard to the presence of various risk indicators and other information available. Risk assessment on all self-assessed taxpayers, including public bodies, is conducted a number of times a year. I am assured by Revenue that compliance interventions in the case of public bodies is an ongoing aspect of their work.
94. Deputy Michael McGrath asked the Minister for Finance the value of direct investments by the National Pensions Reserve Fund in tobacco firms; and if he will make a statement on the matter. [9837/15]
View answerThe National Treasury Management Agency has advised that preliminary unaudited value of investments by the Ireland Strategic Investment Fund in tobacco firms as at 30 January 2014 is €9.6 million.
95. Deputy Michael McGrath asked the Minister for Finance the value of direct investments by the National Pensions Reserve Fund in firms in the armaments and defence industry; and if he will make a statement on the matter. [9838/15]
View answerThe National Treasury Management Agency has advised that the preliminary unaudited value of investments by the Ireland Strategic Investment Fund in the aerospace & defence sub-industry as at 30 January 2014 is approximately €14.1 million. The aerospace & defence sub-industry is the lowest level of sector breakdown available under Global Classification Standards and whilst these companies may have a limited exposure to the armaments and defence industry, this level of detail is not available.
96. Deputy Michael McGrath asked the Minister for Finance the value of direct investments by the National Pensions Reserve Fund in alcohol firms; and if he will make a statement on the matter. [9839/15]
View answerThe National Treasury Management Agency has advised that the preliminary unaudited value of investments by the Ireland Strategic Investment Fund in alcohol firms as at 30 January 2014 is approximately €27.1 million.
97. Deputy Michael McGrath asked the Minister for Finance the current status of the investigation of matters relating to Setanta Insurance; when customers with outstanding claims will receive compensation; and if he will make a statement on the matter. [9841/15]
View answerSetanta Insurance Company Limited is a Maltese authorised company subject to prudential supervision by the Malta Financial Services Authority (MFSA) which is now in liquidation under Maltese law. Any follow-up investigation on the regulatory issues surrounding the firm's failure falls under the responsibility of the MFSA as home regulator. However, my Department and the Central Bank will in due course be reviewing the overall circumstances relating to Setanta and will report to me on what lessons can be learned and how the framework can be strengthened.
The Insurance Compensation Fund provides for payments to meet the liabilities of insolvent non-life insurers in certain cases where it is unlikely that claims can be met otherwise than from the ICF. The administration of the ICF is under the responsibility of the President of the High Court acting through the Accountant of the Courts of Justice. The President's approval is required before the first tranche of payments from the ICF to policyholders can commence. The Accountant has advised that he and the Liquidator have identified claimants for inclusion in the first application to the Fund. The Accountant does, however, have some other legal matters to be clarified and he is doing everything that he can to minimise the impact of this delay.
98. Deputy Michael McGrath asked the Minister for Finance the amount of covered deposits in the Irish banking system at the end of September 2008 under the deposit guarantee scheme; and if he will provide a breakdown by institution if possible. [9852/15]
View answerThe Central Bank has advised that they were not in a position to collect data in relation to covered deposits in 2008. The basis for determining the appropriate deposit that a credit institution should hold in the deposit protection account (for the purposes of the DGS) at that time was total deposits of a bank rather than covered deposits.
The Central Bank has informed me that they collected data that year from credit institutions relating to total deposits which amounted to approximately €330bn. This total deposits figure includes a significant amount of deposits not actually covered by the DGS scheme. As such, they advise that the actual amount of covered deposits would have been much lower than total deposits.
Under the new deposit guarantee scheme arrangements which will take effect from 4 July 2015, the basis for calculation of a credit institution's contribution will be a contribution based on covered deposits. Consequently, the Central Bank have data in relation to the amount of covered deposits since 2014.
99. Deputy Seán Ó Fearghaíl asked the Minister for Public Expenditure and Reform further to Parliamentary Question No. 192 of 18 November 2014, the progress that has been achieved in identifying space for community use at the building developed by Newbridge Credit Union; the form of community engagement that has taken place, or will take place, on this issue; and if he will make a statement on the matter. [9653/15]
View answerThe Commissioners of Public Works advise that the position is largely unchanged since my reply to the Deputy of 18 November 2014.
The Commissioners signed contracts with the High Court appointed Liquidator for the purchase of the former Credit Union building in November 2014 and the transaction has not yet closed. The first phase of fit-out works for Intreo are complete but the second phase cannot commence until Permanent TSB has moved to alternative accommodation.
On completion of the Intreo fit-out works which are scheduled for late May 2015, the issue of community use of part of the building can be reviewed in conjunction with the Department of Social Protection.
