Dáil Éireann Debate, Tuesday - 27 June 2023
236. Deputy Seán Canney asked the Minister for Finance if he will consider requesting the retail banks and credit unions to exempt people with disabilities from bank charges as it is an added cost to those who are most vulnerable; and if he will make a statement on the matter. [31293/23]
View answerAs Minister for Finance, I do not have a direct function in the operations of any bank. Although the State is a shareholder in some of the banks operating in the State, they must be run on a commercial and independent basis, and their independence in this regard is protected by the relationship agreement.
Provision 4.54 of the Central Bank's Consumer Protection Code (the Code) requires that prior to providing a service to a consumer, regulated entities must provide the consumer with a breakdown of all charges which will be passed on to the customer. In addition, provision 4.56 of the Code requires regulated entities to display a schedule of fees on their website and in their public offices. Furthermore, the European Union (Payment Services) Regulations 2018 also requires payment service providers to make information available to consumers regarding charges payable by them.
Where a regulated entity intends to introduce new charges or increase any existing charges, under provision 6.18 of the Consumer Protection Code, it must give notice to affected consumers of the introduction of any new charges or of increases in charges, specifying the old and new charge, at least 30 days prior to the charge taking effect.
The charging of fees is a commercial decision for regulated entities, but this is subject to the regulatory framework which is the responsibility of the Central Bank of Ireland. Under Section 149 of the Consumer Credit Act, 1995, credit institutions must notify the Central Bank if they wish to introduce any new customer charges or increase any existing customer charges, in respect of the provision of any of the following services:
• making and receiving payments;
• providing foreign exchange facilities;
• providing and granting credit; or
• maintaining and administrating transaction accounts.
Each notification received by the Central Bank is assessed in accordance with the specific criteria set out in Section 149 of the Consumer Credit Act 1995. The Central Bank may either approve (in full or at lower levels than requested) or reject a credit institution’s application under Section 149.
In fulfilling its statutory role under Section 149, the Central Bank assesses these notifications in accordance with the following specific assessment criteria as set out in the legislation:
• the promotion of fair competition;
• the commercial justification;
• the effect new charges or increases in existing charges will have on customers; and
• passing on costs to customers.
Approvals are issued in the form of a letter of direction and the entity is legally bound to comply with this letter of direction. The letter of direction sets out the maximum amount the credit institution is allowed to charge.
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 for commercial or competitive reasons.
The letter of direction also sets out that credit institutions must publish the charges to be imposed on notices, leaflets, and promotional material etc. which should be made available to customers and on the credit institutions website if appropriate (the withdrawal of the fees will also be notified to the relevant customers prior to withdrawal).
In respect of credit unions charging members for the provision of services, this is a commercial matter for credit union boards and management.
The Central Bank and I expect credit unions to communicate with their members in a clear and transparent manner on all such matters. As member owned organisations, credit unions should remain cognisant of treating all their members fairly and act in the best interests of members as consumers.
It is the responsibility of individual credit unions to ensure that they comply with all legal and regulatory requirements on an ongoing basis, including any requirements that apply in relation to charging members for the provision of services.
Finally, in relation to current account fees, the Deputy may wish to note that the Competition and Consumer Protection Commission operates a comparison tool for current accounts (including information on fees) on its website. This can be used by consumers to find the account which best meets their needs.
