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Dáil Éireann díospóireacht -
Wednesday, 31 May 1995

Vol. 453 No. 7

Consumer Credit Bill, 1994: Report Stage (Resumed) and Final Stage.

Debate resumed on amendment No. 96w:
In page 53, lines 39 and 40, to delete "section, section 82, section 91 or 92" and substitute "Part".
—(Minister of State at the Department of Enterprise and Employment).

This amendment will introduce a power of arrest without warrant——

On the previous day I indicated to Deputy McDowell's colleague, Deputy Molloy, that I would withdraw the amendment. I was persuaded to withdraw it on the basis of the arguments put forward by Deputy Molloy who was supported by Deputies O'Rourke and O'Keeffe.

Amendment, by leave, withdrawn.

We come to amendment No. 97 in the names of Deputies McDowell and Molloy. It is noted that amendments Nos. 98 and 99 are alternatives. It is proposed that amendments Nos. 97, 98 and 99 be taken together.

I move amendment No. 97:

In page 54, to delete lines 4 to 10 and substitute the following:

"94. —(1) A person shall not engage in the business of collecting repayments whether personally or by his employee or agent——

(a) subject to subsection (2) between the hours of 9 o'clock in the evening on any week day and 10 o'clock in the morning on the following day or

(b) at any time on a Sunday or public holiday (within the meaning of the Holidays (Employees) Act, 1973).

(2) Where the consumer has given a consent in writing in the form set out in the Seventh Schedule nothing in subsection (1) (a) shall prevent a person from also collecting repayments between the hours of 8 o'clock in the morning and 10 o'clock in the morning on any week day.

(3) Any consent under subsection (2) shall be separate from any other document.

(4) A copy of such consent shall be furnished to the consumer within 10 working days of receipt of it by the person to whom it is addressed.

(5) A consent given in the form set out in the Seventh Schedule shall subsist unless and until a revocation of it in writing is received from the consumer.".

The proposal here is to amend the relevant section relating to hours of collection by fixing the hours between 9 o'clock in the evening and 10 o'clock in the morning while allowing a consumer to consent in writing to different hours of collection between 8 a.m. and 10 a.m. on any given morning. It involves setting out in a Seventh Schedule a formula of words whereby consumers would be given the right to set out in a formal document signed by them, an extension of the authorised collecting hours. This is a sensible arrangement. I note that for some technical reasons the original Seventh Schedule tendered in association with this amendment is not now with this copy of the amendments. If he is agreeable to the principle of this amendment I can undertake to move an associated amendment either to the satisfaction of the Minister or alternatively, the Minister's expert draftsman could draft a Seventh Schedule form.

Flexibility should be permissible. where it suits some people to have collections made outside of fixed hours they should be able to opt for the 8 a.m. to 10 a.m. period if they sign a consent to that arrangement being made. It also occurs to me that the whole notion of this proposed amendment is that any such consent can be revoked. Anybody who finds it a nuisance can indicate in writing to the collector that he or she wishes to revert to the normal statutory position and that should be the end of the matter.

Will the Minister accept the amendment as reasonable in principle? If he considers that his officials are more competent to draft the Seventh Schedule they are welcome to do such drafting. Alternatively, I will undertake to move an associated amendment to constitute the Seventh Schedule to set out a form which would meet the case.

I accept there is justification for allowing the collection of repayments outside the hours of 9 o'clock in the evening of any weekday and 10 o'clock of the following day, provided this is the express wish of the consumer and such collections do not cause any disruption to family life or give rise to unseemly squabbles in front of children or other family members.

It is not alone important but imperative that the consumer must give prior consent in writing and in a document separate from the moneylending agreement. It must also be mandatory that the consumer is given a copy of the consent within ten working days of receipt of it by the moneylender.

I regard my acceptance of the principle of collection out of hours as a concession to the legal moneylending industry. Moreover, I would trust that my good faith will not prove unfounded and result in my subsequently being inundated with voluminous complaints about abuses of what is a significant concession.

I agree with Deputy McDowell. The point, due consideration, is reasonable and the protection is there in terms of the consent of the consumer. I need technical advice here. I am disposed towards accepting Deputy McDowell's amendment. I cannot account for the reason the attendant Seventh Schedule is missing. If it is in order for us to accept the amendment and for my colleagues in conjunction with Deputy McDowell to draft the necessary Seventh Schedule — which I understand is not complicated and is brief — I am in agreement. If not, I suggest when the Bill goes to the Seanad——

It is not over yet. I have to enter into this debate.

I thought I was replying to the debate.

Deputy McDowell will reply to the debate.

I thought Deputy O'Rourke was not offering.

Any other Deputies who wish to offer can do so.

I do not wish to drag this out. If that is not technically feasible and if Deputy McDowell wishes to make the amendment available to his colleagues in the Seanad I will accept it there.

I do not agree with this proposal as Deputy McDowell well knows. I do not know whether the Minister was in the Seanad when it was debated. It was a warm day and I was there all day. I think the Minister came in and that he agreed with my point of view. The reason this provision was inserted in the Bill originally was to ensure people would not be bothered in their homes at unsuitable hours, particularly when children are coming and going. The Minister referred to that and said it should not lead to squabbles in front of children. That is one of the areas about which I feel strongly. I recognise that if a vote is called Fianna Fáil cannot win it.

The Minister said he would agree to the amendment in the interests of the legal money-lenders but that it must be accompanied by a separate written agreement by the consumer that he or she will allow these collection call times. Has it occurred to the Minister that there may well be consumers who are not able to cope? There may well be pressure, though not explicitly expressed, or implications of a different kind in connection with getting the required money, which for people in those circumstances is desperately and urgently required, but it will depend on signing another form. The consumer finds that getting that money depends on signing not only the first form but also the form allowing collection times outside of the hours which had been explicitly stated in the Bill which I prepared. I am disappointed. I recognise clearly that forcing a vote is an empty exercise, but this proposal is a negation of an effort to try, within this Bill, to put the interests of the consumer on a par, if not above, the interests of the provider.

The provider has lots of power, knowledge and experience, but the consumer borrowing from legal money-lenders does not have knowledge, experience or commercial cop-on. If they had they obviously would be going to other sources of credit. I recognise that legal money-lenders are necessary for people who need money in particular circumstances and to have it readily available to them but knowing the status of the consumer who will be signing up I do not agree with this amendment. This is a very unwelcome extension to this Bill. I am not calling for a vote because it would be an empty exercise but I am expressing my views very strongly and I will do so outside the House also.

If I thought for one minute this was an anti-consumer measure I would have great sympathy for the arguments put forward by Deputy O'Rourke but I take the view, and I think it is a reasonable one, that this introduces flexibility into the arrangement between the consumer and the lender. It also has the great merit that it facilitates many consumers who would be inconvenienced by a rigid approach such as that originally in the Bill. I do not want to rehash the arguments that have been put forward but I can say for certain that there are many people and many households for whom excluding collection between 8 a.m. and 10 a.m. would be an inconvenience, that they might like to have a repayment scheduled for that time because they have to bring the children to school at 9 o'clock, and go on to a job or do the shopping. There are many people, men and women, for whom that would be a convenience. There is an element of prissiness to all this stuff which is not realistic. In communities where there are door to door collections in respect of insurance, funeral money, milk money, bread deliveries and so on, there is no terrible shame about another man in a suit coming to the door between 8 a.m. and 10 a.m. Children in those communities are not as naive as the Deputy considers.

The Deputy should see what goes on.

Legal money-lenders do not pressurise, abuse or degrade the people with whom they are dealing. It does not make sense for them to do so and I believe the collective credit industry would be the first to desist from this if the Director of Consumer Affairs thought it was the subject of widespread abuse or causing unfairness and that they would be advised by him if he thought there was any social impropriety or unfairness arising out of the operation of this. If he advised the collective credit industry to adopt a particularly sensitive approach to the use of such a consent mechanism they would be happy to abide by his guidance.

This matter can be dealt with in the Seanad as indicated. We appear to have sufficient time to allow the amendments to be prepared and dealt with in this debate, perhaps later on if that can be done. Does Deputy McDowell wish to withdraw this amendment on the basis that we will be dealing with another amendment——

And to undertake to produce the rest of it in this debate?

Yes. Is that satisfactory all round?

I do not find that satisfactory. It would be better to do it in the Seanad where it could be fleshed out satisfactorily.

It is not very satisfactory to send a Bill with an identifiable fault in it up to the Seanad. I would prefer to have it complete. I think this amendment was tabled in complete form on Committee Stage.

If there are objections to dealing with it now, which I would prefer to do, then the wiser course is to deal with it de novo in the Seanad. The amendment as drafted by Deputy McDowell will be taken on board in the Seanad.

Amendment, by leave, withdrawn.

Amendments Nos. 98 and 99 cannot now be moved. Amendment No. 99a has already been discussed with 96g.

I move amendment No. 99a.:

In page 54, line 13, to delete "consumer" and substitute "borrower".

Amendment agreed to.

Amendment No. 99b. has also been discussed.

I move amendment No. 99b.:

In page 54, line 15, to delete "consumer" and substitute "borrower".

Amendment agreed to.

I move amendment No. 99c.:

In page 54, to delete lines 19 to 23, and substitute the following:

"97.—Any moneylender's licence granted by the Revenue Commissioners under section 5 of the Moneylenders Act, 1933 (repealed by section 22) that is in force immediately before the commencement of section 81 shall continue in force after such commencement for the remainder of the period that such licence was so granted as if it had been granted by the Director under section 81 and that section shall be construed accordingly.".

The amendment replaces section 97 which is concerned with the continuity of licences granted under the Money-lenders Act, 1933, on the entry into force of this legislation. By virtue of section 22 the entering into force of the legislation will result in the repeal of section 5 of the Moneylenders Act, 1933, and could thus create a hiatus in which the existing licences would no longer be valid. The purpose of section 97 is to avoid what would be a major disruption to the business of legal moneylending. At present moneylending licences are granted by the Revenue Commissioners on application by an existing or would-be moneylender to the court. Licences are issued annually and have a termination date of 31 July. As it is my intention that Part VIII of the Bill which deals with moneylending shall have legal effect by means of ministerial order before 31 July, 1995 there will still be a period in which existing moneylending licences would have to run before their normal expiry date. Arising from the present amendment all licences issued under the Moneylenders Act in force at the time of commencement of section 97 of the Bill shall continue in force under Part VIII until 31 July following commencement of Part VIII of the Bill. Secondly, and to avoid confusion about the intention of this section, I want to make it clear that it does not provide for extension beyond 31 July to moneylenders' licences due to expire on that date.

I take it this is a tidying up. People who are legal money-lenders now will continue until July when the Minister brings in the money-lenders section of the Bill by regulation and then they will commence under the new licensing system. Is that what the Minister is saying?

That is right.

Amendment agreed to.

I move amendment No. 99d:

In page 54, to delete lines 27 to 30.

This amendment proposes the deletion of section 98 (2) which empowered the Minister to make regulations from time to time amending the form and content of moneylending agreements. The power to make such regulations has been inserted, as Deputies will recall, by virtue of amendment No. 48b agreed on 10 May earlier in the Bill. Thus the wording of section 98 (2) is superfluous and I am proposing its deletion.

Amendment agreed to.

I move amendment No. 99e.

In page 55, lines 20 and 21, to delete "(subsequently referred to in this section as ‘an authorisation')" and substitute "(a mortgage intermediaries authorisation')".

This amendment relates to section 100 which deals with mortgages and housing loans and therefore mortgage intermediaries. It merely entails the insertion of the words "mortgage intermediaries" before the word "authorisation". This amendment, on the advice of the Attorney General's office, gives greater clarity and precision to the usage of the word "authorisation" in Part IX of the Bill which is concerned with housing loans made by mortgage lenders. Within this part of the Bill, a reference to an "authorisation" means a reference to a "mortgage intermediaries authorisation".

Amendment agreed to.

I move amendment No. 99f:

In page 55, to delete lines 28 to 30, and substitute the following:

"(3) An application for an authorisation shall be in writing and in such form as the Director may determine and shall contain—

(a) the true name of the applicant,

(b) the name under which the applicant trades,

(c) the name of any undertaking for which the applicant acts or intends to act as a mortgage intermediary,

(d) the address of any business premises of the applicant to which the application relates, and

(e) such other information that the Director may require.

(4) An application for an authorisation shall be accompanied by a fee of—

(a) £500 for companies and partnerships, and

(b) £250 for sole traders.

(5) Any of the fees referred to in subsection (4) may by regulations be varied.

(6) A person shall not wilfully give any information which is false or misleading in respect of an application for an authorisation.".

This amendment deletes section 100 (3) and substitutes therefor detailed provisions relating to an application for a mortgage intermediaries authorisation. An application must be in writing and must contain the true name of the applicant; the name of any undertaking for which the applicant acts or intends to act as a mortgage intermediary; the business name and address of the intermediary and any other information that the director may require.

The amendment is consistent with amendment No. 87d which introduced similar provisions in respect of applications for a moneylender's licence and also harmonises the information requirements to be contained in both the application for and the authorisation issued to mortgage intermediaries.

The fee structure is also set out specifically in subsection (4) and not just merely by way of reference to section 10 (3) which stipulates the fees payable by credit intermediaries. An applicant who is a company or partnership must pay an application fee of £500. Where the applicant is a sole trader the application fee is £250. These fees may be varied by ministerial regulations under subsection (5).

The final subsection provides that a person shall not wilfully give false or misleading information when applying for an authorisation. Amendment No. 87g inserted a similar duty of truth in respect of an application for a moneylender's licence.

The fees payable are substantial. A sole trader will have to pay an application fee of £250. Small businesses in particular are already paying substantial amounts in PAYE, PRSI and rates and now find that further cost is being imposed on them. I ask the Minister of State to be more lenient given that a substantial amount of money, running into a few million pounds, will be raised for the Office of the Director of Consumer Affairs. The emphasis should not be on profit-making. The charges are over the top.

Representations along the lines of the Deputy's submission were received. The SIMI in particular made representations in this regard. Having considered the matter, in all fairness, having regard to the benefits which derive from being an authorised intermediary, the charges — £500 in the case of a company or partnership and £250 in the case of a sole trade — are not excessive. This is not an unreasonable imposition in 1995.

The fees payable by businesses in the United Kingdom are much lower — approximately £75 in the case of a sole trader and £70 in the case of a small business. The fees payable here will be substantial.

Amendment agreed to.

We now come to amendment No. 99g. Amendment Nos. 99g and 99h form a composite proposal. I suggest therefore that we discuss amendments Nos. 99g and 99h together by agreement.

I move amendment No. 99g:

In page 55, line 30, to delete "and".

Both amendments are connected and concerned with section 100 which deals with mortgage intermediaries. Amendment No. 99g deletes the word "and" because a new subsection, subsection (d), is being added by amendment No. 99h.

Amendment No. 99h inserts a new provision relating to the information which shall be contained in a mortgage intermediaries authorisation. The new subsection requires the name of any undertaking, for example, a bank, building society, trustee savings bank or finance house, for which the holder of the authorisation acts as a mortgage intermediary to be included as part of the information to be specified in the authorisation. This was an omission and is now being remedied on the advice of the Attorney General's office. The authorisation to be issued to credit intermediaries under section 10 has always required that this type of information be included in the credit intermediaries authorisation.

Amendment agreed to.

I move amendment No. 99h:

In page 55, line 40, to delete "holder.". and substitute the following

"holder, and

(d) the name of any undertaking for which the holder acts as a mortgage intermediary.".

Amendment agreed to.

I move amendment No. a99i:

In page 56, to delete lines 6 to 9 and substitute the following:

"(iii) the applicant is the holder of——

(i) a bookmaker's licence issued under the Betting Act, 1931,

(ii) a licence for the sale of intoxicating liquor granted under the Licensing Acts, 1833 to 1994,

(iii) a gaming licence issued under the Gaming and Lotteries Act, 1956,

(iv) a pawnbroker's licence granted under the Pawnbrokers Act, 1964, as amended by this Act, or

(v) a moneylenders licence,".

This amendment deletes subsection (7) (iii) and replaces it with an expanded text setting out certain categories of persons which may not be granted mortgage intermediares authorisations. In addition to the holders of bookmakers', intoxicating liquor and gaming licences, the list is now being extended to include the holders of pawnbrokers' or money-lenders' licences. Also the reference to bookmakers', intoxicating liquor and gaming licences are being expanded to include the specific legislation under which such licences are granted.

Amendment agreed to.

I move amendment No. 99i:

In page 56, line 12, after "is not" to insert "or is no longer".

This amendment relates to section 100 which deals with mortgage intermediaries and specifically to the grounds or reasons why the director may refuse the grant of a mortgage intermediary authorisation. The amendment addresses the situation where an existing holder of an authorisation is no longer a fit or proper person to hold such an authorisation. Until now — this is the net point — this prohibition applied only to new applicants.

Amendment agreed to.

I move amendment No. 99j:

In page 56, to delete lines 23 to 40 and substitute the following:

"(9) The Director may suspend or revoke an authorisation if he is satisfied that since becoming the holder of an authorisation, a mortgage intermediary or any business with which he is connected has been convicted of a criminal offence or a mortgage intermediary has become the holder of a licence referred to in subsection (7) (c) or has failed to comply with any regulations made under subsection (8).

(10) Whenever the Director proposes to refuse to grant, suspend or revoke an authorisation he shall notify the applicant or the holder of the authorisation, as the case may be, of his proposal and shall, if any representations are made to him in writing by such applicant or holder within 14 days of the notification, consider the representations.

(11) Whenever the Director, having considered any representations that may have been made under subsection (10) decides to refuse to grant, suspend or revoke an authorisation, he shall notify the applicant for, or as the case may be, the holder of, the authorisation of the decision and the grounds for such decision and such applicant or holder may, within 7 days of receipt of such notification, appeal against such decision to the judge of the Circuit Court within whose Circuit the business to which the authorisation relates is to be carried on.

(12) A notification referred to in subsection (10) or (11) shall be delivered personally or sent by pre-paid registered post to the business address of the applicant for an authorisation or the holder of the authorisation concerned, as the case may be.

(13) Where a notification under subsection (10) or (11) relates to a refusal to grant a second or subsequent authorisation or a suspension or revocation of an authorisation, the refusal, suspension or revocation shall take effect upon the expiration of the 7 days allowed for the appeal.

(14) Where an appeal is made under subsection (11) by an applicant for a second or subsequent authorisation in respect of a refusal to grant such authorisation or by a holder of an authorisation in respect of a suspension or revocation of an authorisation, the refusal, suspension or revocation shall stand suspended until the appeal is determined or withdrawn and, notwithstanding subsection (5), any authorisation held by the applicant at the time of the appeal shall continue in force until the determination or withdrawal of the appeal.

(15) On the hearing of an appeal under subsection (11) in relation to a decision of the Director to refuse to grant, suspend or revoke an authorisation, the Circuit Court may either confirm the decision or allow the appeal and, where an appeal is allowed, the Director shall grant the authorisation or shall not suspend or revoke the authorisation, as the case may be.

(16) A decision of the Circuit Court of an appeal under subsection (11) shall be final save that, by leave of that Court, an appeal from the decision shall lie to the High Court on a specified question of law.

(17) In an appeal under subsection (11) the Director shall not be awarded or ordered to pay costs.

(18) In this section ‘authorisation' means a mortgage intermediaries authorisation.".

This amendment is concerned with section 100 — mortgage intermediaries — and deletes the present text of subsections (9), (10), (11), (12) and (13) which deal with the appeal procedures where the director refused to grant an authorisation. The amendment also provides for the first time that the director shall have the power to suspend or revoke a mortgage intermediaries authorisation.

I will now deal with the new provisions ad seriatim which are similar to those introduced by way of amendment 91 in respect of moneylenders licences. In new subsection (9), conviction for a criminal offence during the time of holding an authorisation, becoming the holder of bookmakers, liquor, gaming, pawnbrokers or moneylenders licences, or contravention of regulations made under subsection (8) shall now be grounds on which the director may suspend or revoke an authorisation.

Subsection (10) corresponds in a large measure to the present subsection (9). It extends the provisions of the existing subsection to the director's suspension or revocation of an authorisation. Consequently, where the director proposes to refuse to grant an authorisation, or proposes to suspend, revoke or vary the terms or conditions of a current authorisation, he must notify the applicant or the holder of the authorisation, as appropriate, of his proposal. Such applicant or holder is entitled to make, within 14 days of receipt of the notification, representations to the director in respect of his proposal.

Subsection (11) provides that, if having considered any representations made under subsection (10), the director decides not to grant the authorisation or decides to suspend or revoke an existing authorisation, he shall notify the holder or the applicant of the decision and the grounds on which he has based his decision. The holder or applicant may, within seven days of receiving the notification, appeal the decision to the Circuit Court within whose circuit the business to which the authorisation relates is to be carried on.

The provisions of subsection (12) replace subsection (13). Any notification made under this section from the director must be delivered personally or sent by pre-paid registered post to the business address of the mortgage intermediary or applicant.

Subsection (13) provides that where the notification refers to a refusal to grant a second or subsequent authorisation, a suspension or revocation of an authorisation, such refusal, suspension or variation shall take effect upon the expiration of the seven days allowed for the appeal.

Subsection (14) provides that pending the determination or withdrawal of an appeal against the director's refusal to grant a second or subsequent authorisation or his decision to suspend or revoke an existing authorisation, the refusal, suspension or revocation shall not take effect, and any authorisation held shall continue in force until the appeal is finalised.

Subsection (15) replaces the provisions of subsection (10). The Circuit Court may either confirm the director's decision to refuse to grant, suspend or revoke an authorisation or to allow the appeal. Where the appeal is allowed the director shall grant the authorisation or shall suspend or revoke the authorisation, as the case may be.

Subsections (16) and (17) which reinstate the provisions of subsections (11) and (12) are standard legislative provisions. In the case of an appeal the director shall not be awarded or ordered to pay the cost of that appeal. The decision of the Circuit Court shall be final except where, with the permission of that court, the decision may reside with the High Court on a specified question of law.

Subsection (18) serves to define the "authorisation" as being a mortgage intermediaries authorisation.

Finally, the reference in new subsection (9) to subsection 7 (c) may seem confusing. The letters (a), (b), (c) etc. are now being inserted for Roman numerals (i), (ii) etc.

Amendment agreed to.

I move amendment No. 99k:

In page 56, between lines 40 and 41, to insert the following:

101. —The holder of a mortgage intermediaries authorisation shall display in a prominent position in any premises where the holder engages in the business of being a mortgage intermediary—

(a) a copy of the authorisation, and

(b) a notice stating clearly the name of any undertaking for whom the holder acts as a mortgage intermediary.

102. —(1) A person, other than the Director or an officer of the Director acting on behalf of the Director, shall not alter or attempt to alter a mortgage intermediaries authorisation.

(2) A person shall not falsify or attempt to falsify a mortgage intermediaries authorisation.

103. —Where the holder of a mortgage intermediaries authorisation ceases to act on behalf of any undertaking specified in the authorisation or commences to act as a mortgage intermediary on behalf of any undertaking not specified in the authorisation, the holder shall upon such cessation or commencement inform in writing the Director of the change and forward the authorisation to the Director, and the Director shall accordingly, as he sees fit, amend the authorisation or issue another authorisation incorporating the change.".

This amendment inserts a new section 101 into the Bill and imposes an obligation on a mortgage intermediary to display a copy of the authorisation, granted by the Director of Consumer Affairs, in a prominent place in any premises where he engages in his business. He will also be obliged to display a notice in these premises stating clearly the name of any undertaking for whom the holder acts as a mortgage intermediary — for example, banks, building societies etc.

Amendment agreed to.

I move amendment No. a991:

In page 56, between lines 40 and 41, to insert the following:

101. —The Minister may prescribe that a person or class of persons shall not be regarded, for the purposes of this Part, as being a mortgage intermediary.".

This new section provides that the Minister may prescribe that a person or class of persons shall not be regarded for the purposes of Part IX of the Bill, which is concerned with housing loans, as being a mortgage intermediary. My purpose in bringing forward this amendment is to exclude tied branch agents of the building society members of the Irish Mortgage and Savings Association together with those of the Irish Permanent PLC, from the procedures whereby they would have to be authorised as mortgage intermediaries by the Director of Consomer Affairs. These tied branch agents, of which there are about 500, represent the institutions generally in provincial towns but sometimes in city suburbs.

I welcome this amendment. Am I correct in saying that where an agent is operating for a building society, that agent has the right to more than one agency for mortgage purposes?

For all intents and purposes what we are talking about here are branches of building societies. All the symbols and product brand name of that building society would be displayed. On consideration I do not think it would be appropriate to have duel levying of the fee.

Amendment agreed to.

We now come to amendment No. 991. I observe that amendment No. 99m is related and I suggest therefore that we discuss both amendments together.

I move amendment No. 991:

In page 62, lines 14 and 15, to delete "and the possibility that such insurance may also be available from other insurers".

These amendments refer to the Committee Stage debate when Deputy Dukes said the requirement to be incorporated in regulations I shall make after consultation with the Minister for the Environment regarding the disclosure of charges, fees, commissions and expenses, that a mortgage lender or intermediary with an exclusive arrangement with an insurer, should disclose that such insurance may be available from another insurer, was superfluous and unnecessary. Deputy Dukes also adverted to a similar requirement relating to the availability of housing loans from other mortgage lenders. As I indicated on Committee Stage, I agree with the Deputy's views and these amendments give effect to that proposal.

Amendment agreed to.

I move amendment No. 99m:

In page 62, lines 20 and 21, to delete "and the possibility that the borrower may obtain a housing loan from another mortgage lender".

Amendment agreed to.

I move amendment No. 100:

In page 64, between lines 42 and 43, to insert the following:

117. —A provider of credit shall not discriminate against a consumer on the grounds of sex, sexual orientation, belief, marital or social status or area of residence in the offering, negotiation or granting of credit.".

I have had correspondence from and discussions with the Minister for Equality and Law Reform concerning the Equal Status Bill he is drafting which will prohibit discrimination on specified grounds of gender, marital status, family status, sexual orientation, religion, age, disability, race, colour, nationality, national or ethic origin and membership of the travelling community. The Minister for Equality and Law Reform has drawn it to my attention that this amendment could compromise the proposed anti-discrimination legislation for which he has responsibility. I share his view that rather than having two unaligned Bills dealing with discrimination in the consumer credit area, with the attendant risk of compromising the Equal Status Bill and Employment Equality Bill, the amendment to the Consumer Credit Bill should be withdrawn.

I am mindful that my colleague has informed the Dáil of his intention that the Equal Status Bill will be published this year. Equally I am cognisant that it is not good practice to propose provisions which have wide-ranging application in a specific and dedicated legislative measure. In this case certain grounds of discrimination would be confined to and isolated in separate legislation. In these circumstances I withdraw the amendment.

I apologise for not being here sooner but there were other pressing political matters with which I had to deal. Is the Minister of State proposing to withdraw what he produced?

I did not produce it.

I produced it.

I do not believe the Deputy did.

From where has this arisen?

I am prepared to engage in this type of debate.

Perhaps we can have an exchange of views. We are on Report Stage.

For the purposes of information.

We can have an exchange of views to secure information.

Is it the case that the basis of this amendment was a proposal by the Minister for Enterprise and Employment, Deputy Bruton?

That is correct.

Which I accepted at the time.

Is the Minister amending it?

I am withdrawing the amendment.

The one I had accepted?

I greatly regret that I do not make any decisions based on the way the Deputy makes hers. I withdraw the amendment for the reasons I stated.

I came into the House late and I did not hear them.

With deference to the Deputy, I appreciate she was involved in other business. I am withdrawing the amendment because of representations from my colleague, the Minister for Equality and Law Reform, who is bringing forward an equal status Bill that will deal comprehensively, more so than the provisions in this Bill, with these matters of discrimination. He advises, and I concur, that it could compromise his prospective legislation if I were to persist in a dedicated legislative measure. Accordingly, I am withdrawing it for that reason. His Bill will more than comprehensively cover the area.

Did the Minister of State discuss the matter with his colleague in the Department of Enterprise and Employment who originally tabled the amendment and which I was glad to accept on that occasion?

I have no objection to Report Stage being turned into Question Time. With due respect to Deputy O'Rourke, especially on her birthday, and on which I offer my heartiest congratulations——

I do not want to hear any of the Deputy's soft talk.

——and I hope that for many a birthday to come I will be looking across the floor at her from this position but it is none of her business what I discuss with my boss.

The Minister is getting as good as the Taoiseach. Let me now give my dissertation on the amendment.

The Chair is anxious to be liberal and to allow a fair exchange of ideas so that the House and Members will know clearly what exactly they are discussing, but I cannot forget my duty. We are discussing Report Stage of this measure and Members may speak once only, with the exception of the Minister of State, who has the right of reply in this instance. Please excuse me if I do not permit a Committee Stage debate.

Even on birthdays? It is extraordinary that a Minister, when in Opposition, tabled an amendment which was accepted by the then Minister and the Department withdraws the amendment put forward by its political head. Life becomes more bizarre daily in this House. I am not referring to the Chair's activities, but to those of some Members of the House.

There is some merit in the Deputy's point. A promise was given that an evaluation report would be given to an applicant applying to a financial institution for a loan for accommodation. This involves the gender issue on which we are agreed. Does it still stand that an applicant must be informed by the manager of the lending institution concerned of the reasons an application is rejected? It is traumatic for small borrowers, especially those in small businesses, whose loan applications are rejected whether on the grounds of sex or traveller status. Is there any provision in that section which will make it obligatory for the lending institution to state its reasons for rejecting an application, whether on the grounds of lack of ability to pay, sex, a bad record with another institution or a default in payment on a previous loan? We are all very much aware that there is a good deal of information available to financial institutions through the credit bureau as records can now be checked. I understand agreement has been reached between those bodies, especially for hire purchase purposes. As lending institutions may not inform loan applicants of the reason their applications are rejected that poses problems for those applicants who are not aware of the reason they are refused, particularly those making a once off purchase whether buying a property, developing a business of requiring working capital. Will the Minister elaborate on that and consider incorporating a provision to provide for that in the section?

At this stage I take it that the Minister is applying to the debate on amendment No. 100.

The answer to Deputy O'Keeffe's question is "yes". I refer him to section 122 and I have a tidying up amendment to that. He will recognise that the fear he articulated is adequately provided for in that section. The equal status Bill will cover banking and insurance as well as other services. There is an obvious overlap between this provision and provisions in the equal status Bill. This amendment omits many of the grounds of discrimination, including disability, included in the equal status Bill and introduces new grounds of discrimination not covered by the equal status Bill. I propose withdrawing the amendment.

Amendment, by leave, withdrawn.

I move amendment No. 100(a):

In page 65, lines 1 and 2, to delete "credit agreement or consumer hire".

This amendment to section 118 which restricts the use of inertia selling provisions relates to amendment No. 4 and the removal of hire purchase from the definition of a credit agreement. This amendment ensures that the restrictions on the use of inertia selling provisions will apply equally to credit agreements, hire purchase agreements, consumer, hire, money lending and housing loan agreements. For all such agreements provisions which require the consumer to indicate positively that he or she does not wish to purchase any goods or avail of any service in relation to the agreement are prohibitive. Normally the positive indication is by means of placing a tick in a box. The banning of intertia selling has been a feature of all recent national and EU consumer protection legislation, for example, doorstep selling regulations, the EU time share directive and so on.

Amendment agreed to.

I move amendment No. 100(b):

In page 65, line 7, to delete "creditor" and substitute "person who inserted the provision".

Section 118 (1) bans the insertion by any person of a requirement in a credit agreement, a consumer hire agreement or the proposal on a loan application form in connection with such agreements that the consumer must indicate positively that he does not wish to purchase any goods or services in relation to the agreement. Normally that means that a consumer must tick a box. If the tick is not placed, the consumer is obliged to make the purchase of the goods or service. The effect of the amendment is that liability for the use of inertia selling will now reside with the person who inserted the provision and not the creditor. That is the net point and in line with the Committee Stage amendment No. 288 which extended the prohibition contained in subsection (1) on the use of inertia selling from the creditor to the more general term "person".

With whom does the responsibility for ticking the form now rest?

Ticking the box is the normal indication in terms of inertia selling. The net point is that liability now rests with the person who inserted the provision rather than the creditor. The amendment proposes to delete the word "creditor" and substitute it with the word "person who inserted the provision".

They are one and the same.

They can be. The term "person" is more all-embracing than the word "creditor".

That is acceptable if that is part of the Attorney General's wonderful wisdom from where we are told all these matters arise. That is what I used to be told, I now know from where they arose and I also knew that at the time. The Minister of State is saying that the term "person" is more precise than the word "creditor".

Amendment agreed to.
Bill recommitted in respect of amendment No. 101.

I move amendment No. 101:

In page 65, between lines 11 and 12, to insert the following: "(b) obtain goods on credit or hire,".

Section 119 prohibits a person from sending, with a view to financial gain, a document to a minor which invites the minor to borrow credit, to obtain services on credit or to apply for information or advice regarding borrowing credit or otherwise obtain credit or hiring of goods. There is an unwitting omission in this requirement, namely, that the prohibition does not apply to circulars regarding the procurement of goods on credit or hire. This omission, to which the Deputy's favourite office has drawn my attention, is being rectified in this amendment.

It is the Minister of State's favourite office.

I am happy with the office, but I appreciate we may differ in that regard.

Amendment agreed to.
Amendment reported.

I move amendment No. 101a:

In page 65, to delete lines 15 to 21, and substitute the following:

120. —Except where otherwise provided for in this Act, a creditor or an owner—

(a) shall not, in any agreement—

(i) exclude or restrict any liability imposed on any person or any right conferred on a consumer, or

(ii) impose any further liability in addition to any liability imposed on a consumer, by this Act, and

(b) shall not be entitled to enforce any agreement which so excludes or restricts any such liability or imposes any such further liability.".

This amendment replaces section 120 which contains similar provisions. However, due to amendment No. 4 which removed hire purchase from the definition of "credit agreement", "an agreement" is used in the amendment as opposed to "credit agreement" or "consumer hire agreement." The scope of the section extends to all agreements for various forms of credit. Paragraph (a) is a redraft of paragraph (a) and (b) of the original Bill and paragraph (b) contains, a new provision to the effect that a creditor or owner, as the case may be, cannot enforce an agreement which excludes or restricts liability or imposes further liability as set out in paragraphs (a) (i) and (ii).

What is the purpose of this amendment? Why does the new provision arise?

It arises from the removal of hire purchase under section 4. The Bill now refers to "an agreement" which covers all agreements, not just some credit agreements.

Does "an agreement" embrace all agreements?

That is correct.

Does it cover matters that may arise regarding various types of credit agreement which are now loosely grouped under the term "an agreement"?

It does. In an earlier section we removed hire purchase from the definition of "credit agreement". This phraseology covers all agreements.

Amendment agreed to.

I move amendment No. 101b:

In page 65 to delete lines 31 to 37 and substitute the following:

"(1) Where a creditor or an owner refuses to enter into an agreement with a consumer, he shall disclose to the consumer the name and address of any person from whom he sought information concerning the financial standing of the consumer who gave information which influenced the refusal, within 14 days after receiving a request in writing to that effect from the consumer.".

Deputy O'Keeffe queried this matter earlier. The amendment redrafts section 122 concerning a duty to disclose information on the financial standing of the consumer. Under section 122 if a creditor or an owner refuses to enter into an agreement for credit, hire purchase or consumer hire with a consumer, that person must disclose, within 14 days of receipt of a written request from the consumer in question, the name and address of any person from whom the creditor or owner has sought information on the financial standing of the consumer, where such information influenced the refusal to enter into an agreement. The principal change from the present text is that the information given by third parties must have influenced the refusal decision.

My concern relates to the sourcing of information by institutions on behalf of consumers where an application for credit is refused. I understand that for hire purchase credit or leasing arrangements, in particular, a register of customers is compiled by financial institutions. Will such information and information on credit rating be available to consumers on demand?

I am not sure I understand the Deputy's query. In circumstances where a reference has a negative effect and is an influential factor in a consumer being refused credit, the provisions of this amendment provide that within 14 days of a written application the consumer must be made aware of the identify of the third party. Some of the wider information sought by Deputy O'Keeffe would be covered under the data protection legislation. Those matters would be more appropriate for discussion under the freedom of information legislation. We were concerned that a person could blacklist a consumer and be the cause of the consumer being refused credit. Under this provision, having submitted a written application, the consumer is entitled to be made aware of such information within 14 days.

Amendment agreed to.

I move amendment No. 101c:

In page 66, line 41, after "shall," to insert "as soon as may be reasonable,".

This amendment relates to section 124 of the Bill which deals with the nature of "finance arranged" to be explained to the consumer. The seller of goods, acting as a credit intermediary, must disclose in writing certain facts to the consumer such as the nature of the financial accommodation on offer, the amount, number and frequency of payments, the total amount payable, the APR, the name of the undertaking for which he — the seller — is acting as a credit intermediary and details or any commission, payment or consideration of any kind received from the undertaking for arranging such financial accommodation, before any agreement to purchase the goods in question shall be entered into.

The present wording could give the impression that this information should be provided immediately on demand.

In recognition of the fact that the sales person-credit intermediary may not always have all of the requisite details readily available, I am, at the suggestion of the draftsman, including a "reasonable" clause whereby the seller gives the required information as soon as may be reasonable. I should stress that any agreement shall not be entered unless and until all the required information is given to the consumer.

Is this a new provision?

I note a disturbing trend in such new insertions in the Bill. This provision states "as soon as may be reasonable", which sounds reasonable but opens a chasm between the consumer and the giver of credit. Under this provision information need be given only as soon as may be reasonable. Surely it should be given immediately. Who will decide this? Will it be the provider of the credit? That might not be in the best interests of the consumer. When in Opposition, the Minister of State frequently made the point to me that consumers are constantly in the position of supplicator when applying for credit and believe that everything will be great once they receive the credit. The same applies to people seeking mortgages, bank overdrafts and so on.

Most people are apprehensive when seeking credit and feel a sense of relief once it is sanctioned. Who will decide the timespan in which it is reasonable for information to be given?

I do not wish to engage in acrimony with Deputy O'Rourke, certainly not on her birthday. She made some comments about noticing new trends in the legislation. The only trend she should have noticed is that there were flaws in the Bill which, in the opinion of whomsoever, had to be rectified.

Of the Attorney General's office.

Very frequently. Some of the changes are motivated by me but quite a few are motivated by the draftsman's office. He is seeking to do no more than tidy up certain areas of the Bill.

Who decides "as soon as is reasonable"?

There are two answers to that. It is a well established precept in common law that what is reasonable depends on the particular merits and circumstances of the argument. Far from shifting the balance as between consumer and credit institution, the definition of "reasonable" does not matter in the sense of whether it is two or three weeks, ten days or whatever, because any agreement shall not be entered into unless and until all the required information is given to the consumer. The agreement is not consummated until the consumer has the information. It does not matter, therefore, whether it is ten days or two weeks because it does not shift in any way the balance as between consumer and lender. There is little point in us having an emotional argument to that effect. The fact of the matter is that it can be quite a complex business. The Deputy confessed that when she was Minister she did not understand APR——

I did but the Minister said he did not understand it either.

——although she was sponsoring the Bill. She now expects the sales person in the local garage in Ballynacarrigy to understand every detail and have it at his fingertips so that he can tell the consumer there and then what it is.

That may not always be possible and, in any event, there is no irrevocable agreement entered into because until such time as the consumer gets the information, the agreement is not consummated. I am satisfied that the consumer is fully protected in these circumstances and that it is reasonable to give the salesman in the garage in Ballynacarrigy an opportunity to check his facts and ensure that all of the——

Ballynacarrigy is in Westmeath and it is a Labour stronghold. The Minister's colleague, Deputy Penrose, is the king of Ballynacarrigy.

I hope the Deputy is not implying that car salesmen would not be members of the Labour Party. I would be very offended if that were the case.

This is a reasonable flexibility and does not in any way disadvantage the consumer.

Amendment agreed to.

I move amendment No. 102:

In page 67, between lines 32 and 33, to insert the following:

"Provided that such fee is to be borne by the credit institution and not transferred in any fashion to the customer,".

This refers to an earlier amendment which I tabled on Committee Stage and which I now reproduce. It requests that the fees to be charged by anybody seeking permission from the Director of Consumer Affairs to invoke an increase in their terms be borne by the credit institution and not by the consumer. I have been reliably informed by various groups of people who have come to see me about this matter that they will be passing these fees on to the consumer. They do not intend to bear the cost within the financial infrastructure of the institution.

Over the past two months I have met separately with representatives of the Irish Bankers Federation, the Irish Finance Houses Association and the Irish Mortgage and Savings Association. Each of them in turn made submissions to me in respect of a number of matters in the Bill, including section 125. I have also taken the opportunity of consulting with the Director of Consumer Affairs who will have responsibility for bank customer charges. Indeed, yesterday I received a further submission, which I have not had an opportunity to examine, from the Irish Bankers Federation on a range of issues.

It is one of the curiosities of the progress of this Bill that the longer it is in the process of enactment, the more submissions it attracts.

I agree with the Minister.

Deputy O'Rourke has so remarked on a few occasions. However, I hope that Members on both sides of the House can be pleased that, ultimately, the Bill will be the better for having gone through this re-evaluation.

I want to assure the credit institutions that the director shall not subject to scrutiny any charges, terms or conditions for which the approval of the Central Bank has already been given. Equally, when assessing proposals to increase existing charges or to introduce new charges for existing services, the Director shall have regard to the commercial justification, as well as the consumer interest, including the cost increases which the applicants shall put forward in support of their proposals.

In this regard I would emphasise — and this is relevant to the amendment put forward by Deputy O'Rourke — that the legislation does not require the director to allow banks or financial institutions pass on any costs, including the £25,000 fee, in the form of increased charges. In fact the opposite is the intention and this is the purpose of subsection 6 (b) of section 125. Banks and financial institutions will now have cause to reflect before deciding to seek to increase charges because of the £25,000 fee. The need to raise charges will arise from other costs and the cost of the fee will only arise if they seek to pass on these costs in whole or in part. One of the primary reasons for having a fee of this level is to discourage too frequent and frivolous applications. From the reactions I have heard to date, I am confident this objective will be achieved.

Following on these discussions I am looking at the range of charges which would be covered by the legislation. The main focus and source of both consumer and business concerns are in relation to what is commonly referred to as transaction charges. Transaction charges comprehend the following customer services, grant and management of overdraft facilities; making and receiving payment; providing foreign exchange or bureau de change facilities and issuing of statements related to these services. I am mindful of the fact that some financial institutions provide services for wills, trustee services and conveyancing. It was clearly never the intention that the task of assessing charges by the Director of Consumer Affairs would be concentrated on the type of services I have just mentioned.

Arising from the recent meetings, I am also examining the question of terms and conditions. Regulations signed by the Minister for Enterprise and Employment on 1 February 1995 giving effect to the EU Unfair Terms Directive adopted in 1993, outlaw all unfair terms in consumer contracts concluded after 31 December 1994. These regulations give extensive powers to the Director of Consumer Affairs and, in particular, allow him to go to the High Court seeking an order prohibiting the use or, as appropriate, the continued use of unfair terms. The regulations also impose a duty on sellers or suppliers, including financial institutions, to ensure that terms in consumer contracts are written in plain, intelligible language. In any case, where there is doubt, the interpretation most favourable to the consumer must prevail.

It could be argued, therefore, that the consumer interest in regard to terms and conditions not individually negotiated with financial institutions is already well protected and adequately safeguarded. But the same does not hold true to regards business customers, especially small and medium size enterprises. This vital source of new jobs and product innovation must not find its path to development impeded or their ability to compete against the best internationally stifled by an unfair regime of bank terms and conditions.

The Central Bank is not obliged to respond within a particular period to notifications to increase existing charges or to introduce new charges. With the proposed requirement to pay an application fee, it is justified that the Director of Consumer Affairs should respond within a reasonable period to such notifications. This is the practice in the case of, for example, planning applications. It has also been represented strongly to me that a "fast track" response period should be provided for new products. For this purpose new products would need to be carefully defined. Two criteria are particularly relevant (a) the product was not previously offered to its customers in Ireland; (b) is being offered in a materially different way and is being offered as a choice. Other issues raised with me and to which I am also giving attention relate to: whether institutions, such as building societies, would be allowed to pass on increases in charges where they would have to pay for the use of money transmission system operated by the clearing banks, without the necessity of having to pay an application fee to the director; the passing on to customers without reference to the director of third party charges, third party charges would mean any charges, cost or expense which is levied by a party other than the credit institution, in connection with the provision of a service to the credit institution or the customer and which is to be discharged by the customer. An example would be the customer paying for a valuation report in connection with a house purchase transaction; allowing certain institutions to make group applications to the director, on the strict understanding that this procedure was not in breach of the competition legislation; the duty of confidentiality on the director and his staff particularly regarding commercially sensitive information.

At this stage my consideration of these various and complex issues has not been completed. Yesterday I received a further written detailed submission on a range of matters in the Bill from the Irish Bankers Federation. I intend to introduce amendments in the Seanad and to report to the Dáil on these and other amendments which may be adopted in the Upper House. I regret that I cannot accept the Deputy's amendment and I have been advised that it is not capable of being enshrined in law.

The Minister made a long speech and covered many matters that had nothing whatsoever to do with the amendment I tabled, but that is his prerogative. I will proceed to do the same and will give the history of transaction charges.

The increasing complexity, range and number of bank transaction charges which the ordinary consumer and the small businesses were charged was the genesis of this Bill. My concern about this led me to seek to redress the imbalance. The Minister will know I am telling the truth. I pestered the Government with my ideas and at the end the then Minister for Finance and the then Taoiseach Deputy Reynolds and the Government gave me permission to go ahead and the amendment was tabled. This led to a very acrimonious debate in Setanta House after the Second Stage debate. I sought to remove responsibility for monitoring and giving permission for bank transaction charges from the Central Bank, which had the legislative power to do so but was not fulfilling it and transfer it to the Director of Consumer Affairs who was keen and eager for it.

The Central Bank while having the legislative right to monitor bank transaction charges seemed to be doing so on the nod, so to speak, as applications came in. We were told that due process had been followed but announcements of new and bewildering transaction charges were made with remarkable rapidity. This was the beginning of the debate and a frustrating debate it has been. It is not that people are being charged that is the main issue, but that consumers do not know for what they are being charged. I know that some banks are making an effort to address this but I do not know how far they have got as I have not checked on it lately. A bank statement will show an impenetrable sum for bank charges, although in some cases a key is given for the various small signs indicating what the charges are for. However, to be fair to the credit institutions they have tried to rectify this situation during the past two years. At the early stages, possibly three years ago, one of the major banks agreed to supply a page with details of all the customer's charges in front of the statement but it had to alter the computer programme to do so. People are charged for each cheque issued, for each cheque lodged, for time with the bank manager — although I find that particularly difficult to take.

Today I received correspondence from somebody who had been invited by the manager of a credit institution to discuss business with him and he was very irritated when he was charged for the time he had spent with the manager. I find that inexplicable. One is not charged for the time it takes to make any other purchase. Be that as it may, some banks have made a real effort to redress this and I accept that. Equally, some banks have made a real effort to cater for small businesses, in particular, the Bank of Ireland has made a very real effort and has produced a business plan for small businesses and gives guaranteed loans at guaranteed rates for a guaranteed length of time and one's home is no longer needed as collateral. This is a huge relief.

I have been most pressing in my demands on the banks and I recognise what they have tried to do. The Minister is continuing my effort and is seeking to transfer some responsibilities from the Central Bank to the Director of Consumer Affairs. I hope the Minister will give expression to the fact that it is the complexity that bewilders consumers who want things explained. Consumers want clearly explained the service charges they are paying.

The Minister of State referred to submissions and I recall there was not a day when there was not a new submission one had to consider and one wondered whether it would offset something that had been agreed earlier. The Minister of State proposes to levy a charge of £25,000 on banks and credit institutions when they make changes in bank charges but does that apply to every transaction of every credit institution as distinct from banks and is it on a sliding scale?

Representations were made to me about smaller institutions. If you have profits of the order of £300 million, £25,000 is not significant but if you are a small one-stop shop it could be significant. I received a further submission yesterday which I am examining.

That is why I asked if there was a sliding scale. Will the Minister deal with it by regulation or legislation?

I will come back to the House. I will bring it to the Seanad and if changes are made there that require me to bring it back here I will do so.

Will the Minister's study of the submission he received regarding one-stop shops be aired in this House?

Yes, if I decide to act on them.

The Minister said he will put that forward in the Seanad and if changes are made he will bring it back to this House. Will it be for nothing or debating?

I wish to——

Deputy O'Rourke's reply concluded debate on amendment No. 102. I hesitate to rule against the Deputy. If he wishes to make a brief observation he may do so.

Amendment, by leave, withdrawn.

Amendments Nos. 102a and 102b are related and may be discussed together.

Bill recommitted in respect of amendment Nos. 102a and 1026.

I move amendment No. 102a;

In page 70, between lines 40 and 41, to insert the following:

128.—The Pawnbrokers Act, 1964, is hereby amended by the substitution for sections 7 to 10 of the following sections:

7.—(1) A person shall not carry on the business of a pawnbroker at any premises unless he is the holder of a licence which is in force in respect of those premises.

(2) A person who contravenes this section shall be guilty of an offence.

8.—(1) The Director may grant to a person a licence ("a pawnbroker's licence") upon such terms and conditions as he sees fit to a person to carry on the business of pawnbroker at a particular premises.

(2) An application for a licence shall be in writing and in such form as the Director may determine and shall be accompanied by a fee of £1,000 or such other amount as may stand specified in regulations made by the Minister.

(3) The Director may refuse to grant a licence on one or more of the following grounds, namely, that—

(a) satisfactory evidence has not been given of the good character of the applicant,

(b) satisfactory evidence has been given that the applicant, or any person responsible or proposed to be responsible for the management of the applicant's business as a pawnbroker, is not a fit and proper person to hold a licence, (c) the applicant, or any person responsible or proposed to be responsible for the management of the applicant's business as a pawnbroker, is by order of a court disqualified from obtaining a licence,

(d) the applicant has failed to satisfy the Director that he is a person of financial stability,

(e) the applicant is the holder of—

(i) a bookmaker's licence issued under the Betting Act, 1931,

(ii) a licence for the sale of intoxicating liquor granted under the Licensing Acts, 1833 to 1994,

(iii) a gaming licence issued under the Gaming and Lotteries Act, 1956,

(iv) a moneylenders licence granted under the Consumer Credit Act, 1995, or

(v) an auctioneer's licence granted under the Auctioneers and House Agents Act, 1947,

(f) the applicant's premises are not suitable for the carrying on of a pawnbroker's business, or

(g) the applicant or any business with which he was connected was, during the previous 5 years, convicted of a criminal offence.

(4) A licence shall be valid for the period of 12 months commencing on the date specified therein and shall expire at the end of that period.

(5) The Director may suspend or revoke a licence where he is satisfied that a pawnbroker has become the holder of a licence referred to in subsection (3) (e) or has failed to comply with any of the terms or conditions of the licence or a pawnbroker or any business with which he is connected has been convicted of a criminal offence.

(6) Whenever the Director proposes to refuse to grant, suspend or revoke a licence he shall notify the applicant or the holder of the licence, as the case may be, of his proposal and shall, if any representations are made to him in writing by such applicant or holder within 14 days of the notification, consider the representations.

(7) Whenever the Director, having considered any representations that may have been made under subsection (6), decides to refuse to grant, suspend or revoke a licence, he shall notify the applicant for, or as the case may be, the holder of, the licence of the decision and the grounds for such decision and such applicant or holder may, within 7 days or receipt of such notification, appeal against such decision to the judge of the Circuit Court within whose circuit the business to which the licence relates is to be carried on.

(8) A notification referred to in subsection (6) or (7) shall be delivered personally or sent by pre-paid registered post to the business address of the applicant for a licence or the holder of the licence concerned, as the case may be.

(9) Where a notification under subsection (6) or (7) relates to a refusal to grant a second or subsequent licence or a suspension or revocation of a licence, the refusal, suspension or revocation shall take effect upon the expiration of the 7 days allowed for the appeal.

(10) Where an appeal is made under subsection (7) by an applicant for a second or subsequent licence in respect of a refusal to grant such licence or by a holder of a licence in respect of a suspension or revocation of a licence, the refusal, suspension or revocation shall stand suspended until the appeal is determined or withdrawn and notwithstanding subsection (4) any licence held by the applicant at the time of the appeal shall continue in force until the determination or withdrawal of the appeal.

(11) On the hearing of an appeal under subsection (7) in relation to a decision of the Director to refuse to grant, suspend or revoke a licence, the Circuit Court may either confirm the decision or allow the appeal and, where an appeal is allowed, the Director shall grant the licence or shall not suspend or revoke the licence, as the case may be.

(12) A decision of the Circuit Court of an appeal under subsection (7) shall be final save that, by leave of that Court, an appeal from the decision shall lie to the High Court on a specified question of law.

(13) In an appeal under subsection (7) the Director shall not be awarded or ordered to pay costs.

9.—(1) The holder of a licence may apply to the Director to transfer the licence to another person and the Director may at his absolute discretion transfer the licence according to such terms and conditions as he sees fit subject to the person satisfying the requirements of section 8 (3).

(2) An application for the transfer of a licence under subsection (1) shall be accompanied by a fee of £500 or such other amount as may stand specified in regulations made by the Minister.

10.—A person who in respect of an application to the Director—

(a) under section 8, for the grant of a licence, or

(b) under section 9 for the transfer of a licence,

wilfully gives any information which is false or misleading shall be guilty of an offence.'.".

Amendments Nos. 102a, 102b and 104 to 112 are put forward for the purpose of bringing some of the provisions of the Pawnbrokers Act, 1964 up to date. Discussions have taken place with the Irish Pawnbrokers Association and the Department of Justice about the provisions of the Consumer Credit Bill as they affect pawnbrokers. The proposals are being introduced on foot of these discussions. As part of the package of amendments, the proposed limit on pawnbroking transactions will increase to £5,000. Amendments Nos. 102a and 102b provide that the Director of Consumer Affairs will assume the functions of both the District Court and the Revenue Commissioners in relation to the licensing of pawnbrokers.

Under the Pawnbrokers Act, 1964 a pawnbroker is required to obtain a District Court certificate and thereafter to take out an excise licence from the Revenue Commissioners. They are, in essence, in the business of advancing secured monetary loans and, as the Consumer Credit Bill is the vehicle whereby a complete overhaul of virtually all aspects of moneylending is being achieved, it is appropriate to transfer the pawnbroking business to the regulatory control of the Director of Consumer Affairs.

It is proposed that a pawnbroker will have the right of appeal to the Circuit Court regarding the Director's decisions on pawnbrokers' licensing matters as provided for in section 10 (5) of the 1964 Act. The Director of Consumer Affairs, as the licensing authority under section 8 of the Bill, is being given, under that section, the necessary powers to suspend or revoke a pawnbroker's licence. On Committee Stage, section 15 of the Pawnbrokers Act, 1964, which provides that a pawnbroker may make a special contract with a person in respect of a loan of more than £10, was restored. The purpose of the amendment to the section is to take account of consequential amendments to pawn tickets when a pawnbroker makes a special contract under section 15.

Section 12 restates the law as regards forgery or falsification of a licence or any attempt to do so. The monetary limits of District Court fines specified for the contravention of provisions of various sections of the Pawnbrokers Act, 1964 are being updated as part of the process. The monetary limit for the payment of compensation for the making of frivolous complaints is also revised.

May I contribute again on the amendment?

I thought the Deputy would want to leave on her birthday, especially with the arrival of Prince Charles.

When is the Minister's birthday?

The date has just passed. The Taoiseach and I have birthdays on 18 May.

Did you go out together?

No. We had a very nice cake in Cabinet.

Just for the two of you. That was lovely.

With the united support of all our colleagues.

You did not send a slice to the Opposition. It must have been a lovely sight to see the Minister and the Taoiseach cut the cake together. Did you have champagne?

Unfortunately, it was not photographed. It was an abstemious lunch.

As befits officers of high probity. I had dealings with pawnbrokers. They are a diminishing group. There are four houses in existence which is a far cry from my student days. I shall not bore the House by recalling when I pawned my father's dress suit for one to fit a boyfriend of the day. We never got it back. There was a very accommodating pawnbroker in York Street.

Did the Deputy get her boyfriend back?

At the time the Department of Justice was reluctant to deal with the points made by the pawnbrokers but obviously the winsome way of the Minister won the day with Deputy Owen. I am happy they came to an accommodation.

It is good to include these sections in the Bill. It makes sense to transfer the powers to the Director of Consumer Affairs in light of the activities carried on by pawnbrokers. Like moneylenders they are part of life and fulfil a great need. They played a vibrant part in the life of Dublin as portrayed in one of Sean O'Casey's plays. When I was a student there were many pawnbrokers in the city. Perhaps people are more affluent now and do not need to use their services. I accept that no lobby group is ever satisfied but are they reasonably satisfied?

I am advised that they are reasonably satisfied.

Did the Minister meet them?

No. The limits that applied were so out of date that it is not surprising the number has contracted to four. Two operate a single shop so, in fact, there are only three shops left in the city. I acknowledge the Deputy's graciousness but I would not like her to think that moving the Department of Justice to action was easy or could be repeated. I am very grateful for the detailed and well researched advice I received on the matter but unfortunately it was a twelfth hour development and I might have missed lining out today. I am delighted that this did not happen. The Department took seriously the arguments in the House that it was anachronistic or anomalous for pawnbrokers not to be covered in the legislation. As a result it tackled the matter from the beginning and much care has been taken in drafting the amendments from No. 102 onwards. I am advised — I am sure this is correct — that the pawnbrokers' association is satisfied with the balance that has been achieved. I am glad this area has been included in the Bill as it is the appropriate place for it.

Amendment agreed to.
Mr. Rabbitte: I move amendment No. 102b:
In page 71, between lines 5 and 6, to insert the following:
129.— Any licence granted by the Revenue Commissioners under section 8 of the Pawnbrokers Act, 1964, that is in force immediately before the commencement of this Part shall continue in force after such commencement for the remainder of the period that such licence was so granted as if it had been granted by the Director under section 8 (inserted by section 128*) of that Act and that section shall be construed accordingly.".

Will this come into force on the same day as the provision in regard to moneylenders?

I do not know if we can make the 31 July deadline as regulations will have to be brought in.

The Department of Justice will not be that compliant.

The Department of Justice has been extraordinarily helpful but I doubt if it will be that helpful.

Amendment agreed to.
Amendments Nos. 102a and 102b reported.

I move amendment No. 103:

In page 90, before line 1, to insert the following:

FIFTH SCHEDULE

Notice to be included in Hire-Purchase Agreement.

Right of hirer to terminate Agreement.

1. The Hirer may put an end to this agreement by giving notice of termination in writing to any person who is entitled to collect or receive the hirerent.

2. The hirer must then either—

(a) (i) pay any instalments which are in arrear at the time when he gives notice, and

(ii) if, and when the hirer has paid those instalments, the total amount under the agreement is less than (here insert the minimum amount the hirer is required to pay under section 61 (2) the hirer must also pay enough to make up that sum, or

(b) purchase the goods by paying (here insert the amount the hirer is required to pay under section 61 (3)).

3. Where a hirer has not purchased the goods and the goods have been damaged owing to the hirer having failed to take reasonable care of them, the owner may sue the hirer for the amount of the damage unless that amount can be agreed between the hirer and the owner.

4. The hirer should see whether this agreement contains provisions allowing the hirer to put an end to this agreement on terms more favourable to him than those just mentioned. If it does he may put an end to the agreement on those terms.

Restriction of Owner's right to recover Goods

1. Without the hirer's consent the owner has no authority to enter the hirer's premises for the purpose of taking back the goods (other than a motor vehicle in the circumstances mentioned in paragraph 2 below).

2. The owner of a motor vehicle is entitled to enforce any right which he may have under this agreement to enter any land of the hirer other than his home or any buildings attached thereto.

3. After (here insert the amount calculated in accordance with section 59) has been paid, then, unless the hirer has put an end to the agreement without exercising the option to purchase the goods, the owner of the goods cannot take them back from the hirer without the hirer's consent unless the owner has obtained a court order or is taking a motor vehicle back in accordance with paragraph 4 below.

4. Where the owner has made an application to the court for an order to recover possession of the motor vehicle, he may, if the vehicle has been abandoned or has been left unattended in circumstances likely to result in damage to, or more than normal depreciation in the value of the vehicle, and if the agreement so provides, take back the vehicle and retain possession of it during the ensuing period prior to the making by the court of an order for the purpose of protecting the vehicle from damage or depreciation.".

Amendment agreed to.

I move amendment No. 104:

In page 90, line 16, in the first column, to delete "Section 1" and substitute "Section 2".

This is a drafting amendment.

Amendment agreed to.

We now come to amendment No. 105. Amendment No. 106 is cognate and amendment No. 108 is related. Is it agreed that we discuss amendments Nos. 105, 106 and 108 together? Agreed.

I move amendment No. 105:

In page 90, line 16, in the second column, to delete "£500" and substitute "£5,000".

These amendments will substitute the figure of £5,000 for £500 as the pawnbroking limit. The limit fixed for pawnbroking transactions under the 1964 Act was £50. It was initially proposed to increase this figure to £500 but following representations from the Irish Pawnbrokers' Association to the effect that the limit in the UK and European Union states generally is £15,000 it was decided to increase it to £5,000.

Representatives of the Irish Pawnbrokers' Association made that point to me on the two occasions I met them. I support the amendment.

Amendment agreed to.

I move amendment No. 106:

In page 90, line 18, in the second column, to delete "£500" and substitute "£5,000".

Amendment agreed to.

I move amendment No. 107:

In page 90, between lines 18 and 19, to insert the following rows:

“Section 11

The deletion of subsections 3, 4 and 5.

Section 12

The substitution of the following section:

‘12.—(1) A person who forges or falsifies or attempts to forge or falsify a licence shall be guilty of an offence.

(2) A person, other than the Director or an officer of the Director acting on behalf of the Director, who alters or attempts to alter a licence shall be guilty of an offence.’.”.

The deletions in section 11 are a consequence of the provision in the newly inserted section 8 which introduces amendments to the mechanism for the suspension or revocation of a pawnbroker's licence. The provisions in section 11 which are being deleted allowed a member of the Garda Síochána not below the rank of inspector to bring an application for revocation of licence to the District Court. Under this amendment the Director of Consumer Affairs, the licensing authority under section 8, is being given the necessary powers to suspend or revoke a pawnbroker's licence. Section 12 restates the law as regards the forgery or falsification of a licence and any attempt to do so. It is considered that there is no need to retain those references in the previous section 12 which covered the forging of a District Court certificate since such a certificate is no longer part of the licensing procedure.

I support this amendment which is a natural consequence of an earlier amendment which we agreed.

Amendment agreed to.

I move amendment No. 108:

In page 90, between lines 22 and 23, to insert the following rows:

“Section 15 (1)

The substitution of ‘£5,000’ for ‘ten pounds’.

Section 15 (2) (a)

The substitution of the following paragraph:

‘(a) Where a pawn-broker makes a special contract with a pawner, the pawn-broker shall at the time of the pawning give to the pawner a special contract pawn-ticket which shall contain the particulars set out in the Third Schedule suitably modified to take account of the conditions

Amendment agreed to.

I move amendment No. 109:

In page 91, line 7, in the second column, to delete "the Act" and substitute "this Act".

This is a drafting amendment which proposes to substitute the words "this Act" for the words "the Act" in the Sixth Schedule.

Amendment agreed to.

We now come to amendment No. 110. Amendments Nos. 111 and 112 are related and I suggest that we discuss these three amendments together. Is that agreed? Agreed.

Bill recommitted in respect of Amendments Nos. 110, 111 and 112.

I move amendment No. 110.

In page 91, line 37, to delete "£100" and substitute "£250".

The effect of amendments Nos. 110, 111 and 112 is to increase the monetary limits of District Court fines specified for contraventions of the provisions of various sections of the Pawnbrokers Act, 1964. As regards section 45, the section affected by amendment No. 110, the District Court is empowered under section 45 of the 1964 Act, if it is satisfied that a frivilous complaint of an offence under the Act has been made to order the person making such complaint to pay up to £10 compensation to the defendant. Amendment No. 110 will increase the figure for such compensation to a maximum of £250. The maximum District Court fine as specified in recent legislation is £1,500, hence the figure is being inserted as the appropriate maximum District Court fine for offences under the Pawnbrokers Act. In similar fashion, offences which continue following conviction will now attract a fine at a level of £150 per day. The objective of increasing fine levels is achieved by redrafting section 47 in its entirety.

Will this amendment insert a new section? Did the Minister say that the limit for a District Court fine is £1,500 and if so is that of general application?

That is a general application in all legislation; a couple of years ago the jurisdiction was raised.

It is of general application. Therefore, this is following on the earlier, now seemingly ridiculous, levels of fine for pawnbroker misdemeanours because of the time in which they were couched. At that time they were considered sufficiently heavy. The amendment is agreeable to this side of the House and I have no difficulty with it.

Amendment agreed to.

I move amendment No. 111:

In page 91, to delete lines 38 to 41, and substitute the following rows:

The substitution of the following section:

‘47.—(1) A person who is guilty of an offence under this Act shall be liable on summary conviction to a fine not exceeding £1,500, or to imprisonment for a term not exceeding 12 months, or to both.

(2) A person who, after conviction of an offence under this Act, continues to contravene the provision concerned, shall be guilty of an offence on each day on which the contravention continues and for each such offence shall be liable on summary conviction to a fine not exceeding £150.'.".

Amendment agreed.

I move amendment No. 112:

In page 91, line 48, in the second column, to delete "£1,000" and substitute "£1,500".

Amendment agreed to.
Amendments Nos. 110, 111 and 112 reported.

I seek the agreement of the House to a further amendment which I have here, which is purely an omission that follows from amendment No. 112. It relates to the fines of £1,000 and £1,500. It is another place where the £1,500 should have been inserted. The purpose of this amendment is exactly similar to amendment No. 112 which the Dáil has just accepted. Instead of a maximum District Court fine limit of £1,000 as proposed, this amendment will fix such fine at £1,500. This is the maximum District Court fine.

Where is the amendment?

I understand the orders require me to put the following on the record in regard to the amendment to be moved from the floor of the Dáil (after amendment No. 112).

In page 91, line 49, to delete "£1,000" and substitute "£1,500".

Will that amendment have a number?

Amendment agreed to.
FIFTH STAGE.
Question proposed: "That the Bill do now pass".

The only reason I have been hesitant or reluctant to do my winding up is that——

It will not be the winding up.

——the submissions go on as Deputy O'Rourke has acknowledged. I refer to a detailed submission I received yesterday from the Irish Bankers' Federation. I am aware there are other submissions that require study. I am not holding out any prospect of great change but the organisations who have taken time to make submissions deserve to have them studied in detail and they will be. It may mean that some matters will have to be considered de novo in the Seanad and as a result they will come back to this House in due course. Therefore, whether we are premature in winding up is the question that arises. Notwithstanding that I thank all the Deputies who have stayed with this agreements Bill over an unconscionably long time. In particular I thank Deputy O'Rourke who had a central role in its genesis and in piloting it to Committee Stage. I would like to thank her for her openness in accepting her amendment has been taken on board by me and that as a result the Bill is a better one. I am confident it is.

There are some matters such as Deputy McDowell's amendment today which cannot be finalised because of the Standing Orders of the House but I am satisfied these can be dealt with speedily in the Seanad. I am sure that House will take its responsibilities in the matter very seriously.

It is important and valuable legislation which greatly enhances the rights of consumers. The balance between consumer and lender up to now has been unfairly weighed against the consumer. While we have organisations representing every conceivable sectional interest, consumers have been an unrecognised quantity for too long. This Bill will confer rights on them that they could not have contemplated before and will give additional muscle to the consumer organisations. We have to acknowledge the role of the European Union in inspiring a good deal of this legislation. It is one of the progressive social roles it has played in our legislation. I should refer in passing to the fact that it tackles, and this is long overdue, the scourge of illegal moneylending. Disadvantaged areas and unemployment black spots have for too long in this and other cities been prey to the machinations of illegal moneylenders but that will change when this Bill is enacted. There is a requirement for transparency, intelligibility, clarity and plain speaking in all credit agreements.

I am particularly happy to have been able, as Deputy O'Rourke acknowledged, to bring the pawnbrokers' industry under the ferrule of this Bill and, even more so, the housing loans. To bring the local authorities under the remit of this Bill is an achievement I am pleased about. As a member of a local authority for a number of years I believe it is necessary and it will help the local authority but, most important, it will make the task of the consumer easier and confer explicit rights on him or her which was not the case up to now.

I thank everybody for their patience. I thank my officials and the officials of the Departments of the Environment and Justice, all the Opposition Deputies, my colleague in Government, the Minister for Employment and Enterprise, Deputy Richard Bruton, Deputy Michael McDowell, Deputy Ned O'Keeffe and especially Deputy O'Rourke who was a guiding influence in the early days of the Bill.

I thank Deputy Rabbitte for his generous words. We will be revisiting this Bill because clearly it will provide meaty substance for the Senators who have not had a meaty Bill for some time. I am aware from comments they have made to me that they are waiting to get their teeth into it. I do not think the Bill will have a quick passage through the Seanad. Unless Senators are prepared to work the dog days of July and August the Minister will be back to us in the autumn with the changes the Senators will have made. The arithmetic will have to be done each day of a contentious Vote in the Seanad and that should be interesting.

This is important legislation. When I was demoted by the then Taoiseach, Deputy Albert Reynolds, and went to work with Deputy O'Malley at the Department of Industry and Commerce, to his credit he saw that I was in a very distressed state that morning and said: "You need something to which you can address your mind. Here is the Consumer Credit Bill and get at it". Anybody in this House could find themselves in that position and no reason given. Talk about unfair dismissal. At that time I wanted to get my teeth into something; this Bill provided me with intellectual stimulus and I attacked it with great gusto. For me it is a happy memory even though it was an unhappy phase of my life. Perhaps Deputy O'Malley was glad to be rid of it but for me it was a source of solace and it has remained an abiding interest. It has taken a long time in gestation. In 1995 alone there were three separate books of amendments to be got out. I dealt with it one day at a time. As I got the rafts of amendments I got down to study each night to be ready for the probing of Deputy Rabbitte and Deputy Bruton.

For the consumer this Bill will make a difference, but only if the regulations pertaining to it, the powers given to the Director of Consumer Affairs, are underpinned by proper financial arrangements. There is no doubt about the probity and acumen of the current Director of Consumer Affairs but all the regulations need financial provision to enable them to be enforced.

Did the Minister say he hoped to complete the legal moneylenders legislation by July?

That is my intention.

What will he do if it is not through the Seanad?

If it is not through the Seanad, I cannot do it but my intention is to have it through the Seanad.

I had many such intentions. I wish the Minister luck. May I have the Minister's reassurance that he cannot accept changes from the Seanad without bringing them back here, that it has to be passed by both Houses?

I cannot, unless the Bill is finally passed.

This Bill has been at some time or other under the purview of the Progressive Democrats, Fianna Fáil, Labour in Government with Fianna Fáil and now Democratic Left in Government with Labour and Fine Gael. Everybody has had their say in this Bill. That should make for a Bill which is comprehensive and fair to consumers.

I listened with interest as Deputy O'Rourke made the point about being unfairly dismissed or made redundant a few years ago. If it was yesterday's decision she would have got a generous severance — £100,000 plus. Many Ministers will have big demands to make on leaders now.

I compliment Deputy O'Rourke who was the instigator of the Bill and put much thought into it. It is far-reaching and very good for our people. However, there are a few parts of it of which I am critical. One is the provision in regard to the banks and the £25,000 transactions. If there are ten applications from ten institutions to the Director of Consumer Affairs that will amount to a substantial amount of money plus the annual fee. I hope this Bill will not become another tax gathering Bill bringing money into the Exchequer. The Bill should be in favour of the consumer and not there to make money. Having the annual fee so high and the £25,000 is daft.

I fail to understand why there is nothing to protect consumers and borrowers from the banking institutions being surcharged. If a liability is not paid off on time the banks have the right to charge a very substantial rate of interest. The consumer is never told the true rate. A section should be inserted in this Bill in the Seanad to oblige banking institutions to let customers know of increased costs. Surcharging is very unfair.

On money lending and pawnbrokers I fully agree with the Minister's tightening up in that area and also in regard to home loans from the local authorities. I want to remind him of his unwritten commitment that we will see the regional office for the Munster area in Mallow. Mallow is an ideal centre. I know the Minister will not be in a position to let me know now but I might hear the day after because he has a friend there who shall be nameless. It would be a good plug for future polling days if he could do that.

I would ask the Minister to look at the situation where people are surcharged on their overdraft at a penal rate after 30 days.

I commend the officials. Much work was done with me during that period. I particularly want to commend Hugh Hayden who did a huge amount of work on this Bill in the early stages. All officials worked most willingly with me but Hugh Hayden bore the heat of the day.

Question put and agreed to.
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