Dáil Éireann Debate, Tuesday - 9 April 2024
329. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he continues to monitor the levels of bank charges being imposed by various banks; the basis for such charges, nationally and internationally; and if he will make a statement on the matter. [15417/24]
View answerThe charging of fees is a commercial decision for regulated entities, within the parameters of the regulatory framework.
Under Section 149 of the Consumer Credit Act, 1995 (as amended) (the Act), credit institutions (which includes all banks operating in the Republic of Ireland and retail credit firms since 2022) 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 and robustly challenged in accordance with the specific criteria set out in Section 149 of the Act. 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).
Where credit institutions impose fees, provision 4.54 of the 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 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.
If customers are unhappy with their current account provider for any reason, including cost, they have the right to switch to a different provider. The Central Bank’s switching code (Code of Conduct on the Switching of Current Accounts with Credit Institutions) sets out protections for consumers who switch payment accounts.
