As part of the review of the regulation of Personal Contracts Plans (PCPs) which I commissioned in 2018, Mr Michael Tutty considered the contents and recommendations of an earlier CCPC study on 'Personal Contract Plans: the Irish Market' and also a separate Central Bank of Ireland study 'An Overview of the Irish PCP Market'. Following his consideration of these reports and his other considerations, Mr Tutty produced his report entitled 'Review of the Regulation of PCPs' (available at: https://www.gov.ie/en/publication/5391e5-review-of-regulation-of-personal-contract-plans/).
The Tutty Report recommended that further consumer protections in relation to PCP agreements be introduced and, in particular, it recommended that the provisions of the Central Bank Consumer Protection Code which requires lenders to assess the suitability of the product for the consumer and also the ability of the borrower to repay the debt over the duration of the credit agreement, should be extended to hire-purchase/PCP agreements.
The implementation of this particular recommendation to all the providers of hire purchase and PCP agreements will necessitate new legislation and I have obtained Government approval to draft a Bill to achieve this (see relevant press release attached: https://www.gov.ie/en/press-release/ab741f-minister-donohoe-announces-government-approval-to-draft-legislation-/). It is the intention of Government to publish this Bill as soon as possible.
Hire-purchase providers (entities who underwrite hire purchase agreements) are not currently required to seek authorisation from the Central Bank (or the CCPC) for the provision of hire-purchase agreements such as PCPs. As the Consumer Protection Code is a binding statutory code on entities regulated by the Central Bank and hire purchase providers are not currently authorised by the Central Bank, they are not subject (for the provision of a hire purchase agreement) to the requirements of the Code.
The majority of consumer hire purchase agreements, such as PCPs, are provided through ‘credit intermediaries’ which are authorised by the CCPC. A car dealer would be a typical example of the type of entity that might act as a credit intermediary. Any intermediary who is arranging the credit for the consumer is acting as a credit intermediary, and an intermediary arranging such credit must seek authorisation from the CCPC to act as a credit intermediary. A list of authorised credit intermediaries is available on the CCPC website www.ccpc.ie.
The Deputy may also wish to note that consumers can refer complaints relating to PCP/ hire purchase providers to the Financial Services and Pensions Ombudsman.
