Wednesday, 24 February 2021

Questions (157, 161, 170, 185, 187, 192, 194, 195, 200, 205, 215, 219, 230)

Niamh Smyth

Question:

157. Deputy Niamh Smyth asked the Minister for Finance if matters raised in correspondence by a person (details supplied) will be addressed; the steps he is taking to address the issue for solicitors and their clients; and if he will make a statement on the matter. [9392/21]

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Gerald Nash

Question:

161. Deputy Ged Nash asked the Minister for Finance his views on proposals by banks (details supplied) to impose so-called negative interest charges on transaction monies held in solicitor client accounts for and on behalf of clients and consumers given the unique nature of solicitor’s client accounts; and if he will make a statement on the matter. [9437/21]

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Matt Shanahan

Question:

170. Deputy Matt Shanahan asked the Minister for Finance if his attention has been drawn to the intention of banks (details supplied) to impose negative interest rates on solicitor client accounts; and if he will make a statement on the matter. [9521/21]

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Seán Canney

Question:

185. Deputy Seán Canney asked the Minister for Finance if his attention has been drawn to the fact that the banks are now imposing charges on solicitor client accounts which is adding further costs to borrowers who are trying to purchase homes; and if he will make a statement on the matter. [9755/21]

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Marc MacSharry

Question:

187. Deputy Marc MacSharry asked the Minister for Finance if his attention has been drawn to the fact that the major banks have given notice that negative interest rates charges are to apply to solicitor client accounts used for commercial and conveyancing transactions handled by solicitors, including the buying and selling of houses and land; if he considers this appropriate; and his views on whether this will have a detrimental effect on consumers and create an additional financial burden on borrowers hoping to acquire a home. [9773/21]

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Fergus O'Dowd

Question:

192. Deputy Fergus O'Dowd asked the Minister for Finance if queries raised in correspondence by a person (details supplied) will receive a response; and if he will make a statement on the matter. [9878/21]

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Brendan Griffin

Question:

194. Deputy Brendan Griffin asked the Minister for Finance if he will prevent negative interest charges being applied by banks on transaction monies being held by solicitors (details supplied); and if he will make a statement on the matter. [9919/21]

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Michael McNamara

Question:

195. Deputy Michael McNamara asked the Minister for Finance if he will call on banks (details supplied) not to impose a penalty charge on solicitors' practices who are holding monies for clients in their client account on trust; and if he will make a statement on the matter. [9954/21]

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Brendan Griffin

Question:

200. Deputy Brendan Griffin asked the Minister for Finance if his attention has been drawn to a matter regarding bank charges (details supplied); and if he will make a statement on the matter. [10040/21]

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Pa Daly

Question:

205. Deputy Pa Daly asked the Minister for Finance if he will take all appropriate steps to ensure client accounts as defined in SI No. 421/2001 Solicitors Accounts Regulations 2001, can be exempted from the charging of negative interest rates. [10126/21]

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Patricia Ryan

Question:

215. Deputy Patricia Ryan asked the Minister for Finance if he will intervene to prevent the imposition of charges known as negative interest on monies held in solicitor client accounts for and on behalf of clients; and if he will make a statement on the matter. [10347/21]

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Michael Creed

Question:

219. Deputy Michael Creed asked the Minister for Finance if his attention has been drawn to the general issue regarding negative interest rates being imposed by the pillar banks on monies held on deposit; if his attention has been further drawn to the way in which it relates to solicitor client accounts; his views on whether it is inappropriate to have these charges on such accounts in the circumstances; and if he will make a statement on the matter. [10399/21]

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Christopher O'Sullivan

Question:

230. Deputy Christopher O'Sullivan asked the Minister for Finance if he will consider exempting solicitor client accounts from negative interest rate charges being applied to transaction bank accounts which acts as a second charge on borrowed money often used to complete the purchase of a home or pay off an existing mortgage; and if he will make a statement on the matter. [10550/21]

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Written answers (Question to Finance)

I propose to take Questions Nos. 157, 161, 170, 185, 187, 192, 194, 195, 200, 205, 215, 219 and 230 together.

As the Deputies are aware, as Minister for Finance I have no role in the day to day operations of any bank operating within the State including banks in which the State has a shareholding. I'm precluded from intervening on behalf of any individual customer in any particular bank. Decisions in relation to commercial matters are the sole responsibility of the board and management of the banks, which must be run on an independent and commercial basis. The independence of banks in which the state has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.

The application of interest rate charges is solely a commercial matter for the board and management of each bank.

Deposit balances and liquidity in general has risen significantly across the banking system in Europe in recent years as the ECB has continued to provide additional funds through their asset purchase schemes and long term refinancing operations. This has been further exacerbated by the Covid19 pandemic as households continue to stay at home and save and businesses defer investment decisions. This excess liquidity which has grown significantly in the European system has to go somewhere and in large part it gets placed back on deposit with the ECB who charge the banks -0.50%. The application of negative deposit rates by the ECB has resulted in European banks incurring a consequent cost on deposit accounts. The Irish banks are impacted in a similar way to their European counterparts. The banks across Europe have looked to pass some of the costs associated with negative rates to deposit holders with larger balances. The Irish banks are no different in this regard.

In passing on some of these costs it is important to note that banks cannot differentiate between customers in different sectors and for that reason the approach taken is to apply charges based on the size of the deposit balance.