Dáil Éireann Debate, Thursday - 21 July 2016
142. Deputy Pearse Doherty asked the Minister for Finance his views on the Central Bank or his Department placing a cap on the discount applied to foreign earnings by banks to encourage returning emigrants; and if he will make a statement on the matter. [23963/16]
View answerUnder Section 149 of the Consumer Credit Act, 1995 (as amended), the ('Act') a credit institution must submit a notification to the Central Bank for approval if they wish to introduce any new customer charge or increase any existing customer charge, for certain services. The provision of foreign exchange facilities, as the Deputy is referring specifically to, is covered by this Act.
The proposed charges are assessed by the Central Bank in accordance with the criteria laid down in the legislation as follows:
The promotion of fair competition;
The commercial justification submitted in respect of the proposal;
The impact new charges or increases in existing charges will have on customers; and
Passing on costs to customers.
A notification made under Section 149 may include multiple charges and, having considered and robustly challenged the proposed charge(s) under the assessment criteria, the proposed charges may be rejected, approved at lower levels than requested by the credit institution or approved in full.
Approvals are issued in the form of a Letter of Direction that sets out the maximum amount the credit institution is allowed to charge for the relevant service. The credit institution is legally bound to comply with this Letter of Direction.
Credit institutions are free to impose any pricing differentials for the service up to the permitted maximum and are free to waive fees at their discretion.
Given the existing robust approval process for any proposed charge for the provision of foreign exchange services and the maximum cap for charges, I do not believe a further capping measure is required at this time.
