Seán Sherlock
Question:99. Deputy Sean Sherlock asked the Minister for Finance his plans to regulate PCP finance packages, particularly in the car loan finance sector. [19067/18]
View answerTuesday, 1 May 2018
Questions (99)
Written answers
As the Deputy will be aware Personal Contract Plans (PCP) are a form of Hire Purchase and both the Central Bank and the Competition and Consumer Protection Commission (CCPC) have certain functions and legal powers in relation to the provision of hire-purchase agreements. In the State PCP finance is underwritten by standard financial institutions, manufacturer banks, and special purpose institutions which exclusively offer motor finance.
The Competition and Consumer Protection Commission (CCPC) undertook the first comprehensive study of the Personal Contract Plans (PCP) market in the State. As part of its study the CCPC issued detailed questionnaires to all the financial institutions that underwrite PCP finance in the State. This allowed the CCPC to compile, for the first time, primary data relating to the number and value of PCP finance contracts issued. The report was published on the 6 March 2018 and is available at www.ccpc.ie.
The Deputy may also be aware that an Economic Letter on this area was published by the Central Bank on 28 March. This provides further comprehensive data on the PCP market in Ireland, where at the end 2017 PCP finance accounted for 43%(€1.2 billion) of car-related bank debt. The Economic Letter is available at www.centralbank.ie.
My officials will examine these publications and give careful consideration to what actions, if any, would be appropriate.
On the issue more generally, the Central Bank regulates financial services institutions as set out under legislation but does not regulate individual financial products. Under current legislation (Consumer Credit Act 1995), the CCPC has responsibility for authorising and supervising the credit intermediaries which typically sell PCP contracts to consumers, including garages and retailers. The CCPC provides licenses to credit intermediaries and keeps an online list of credit intermediaries holding a valid authorisation which is available on the CCPC website www.ccpc.ie.
The CCPC also deals with complaints about the advertising of Credit Agreements, issuing Pawnbrokers licenses and the advertising of car finance on credit intermediary websites and in the media. The CCPC’s remit is limited to authorisation, as opposed to having a regulatory role for PCPs. It also has a specific statutory remit to provide personal finance information and education to assist consumers.
My Department continues to keep financial legislation relating to consumer protection under review to ensure consumers are protected. However, the Consumer Credit Act 1995 and the CCPC itself both come under the aegis of my colleague the Minister for Business, Enterprise and Innovation.