Desmond J. O'Malley
Ceist:18 Mr. O'Malley asked the Minister for Enterprise and Employment when the new measures in relation to bank charges will come into effect; and if he will make a statement on the matter. [4485/96]
Written Answers. - Bank Charges.
Batt O'Keeffe
Ceist:98 Mr. B. O'Keeffe asked the Minister for Enterprise and Employment the concerns, if any, he has at the major charges being levied by banks; and the plans, if any he has to introduce legislation to place further restrictions. [4262/96]
I propose to take Questions Nos. 18 and 98 together.
The Consumer Credit Act, 1995 shall enter into force on 1 May 1996.
Part XII of the Act shall confer extensive powers to the Director of Consumer Affairs in relation to the regulation of customer charges by credit institutions. Such charges have been, and, for the present, continue to be, regulated by the Central Bank. I should say, however, that no increases in existing money transmission charges have been permitted over the last two years. In the case of new charges, the introduction of such charges have been permitted only after discussion with the Director of Consumer Affairs.
The relevant section of the Consumer Credit Act giving new powers to the Director of Consumer Affairs provides that:
(a) Any or all proposals to increase existing charges must be notified four months in advance to the director.
(b) Every such notification shall be accompanied by a fee, the amount of which the director shall determine and may be as much as £25,000 per notification;
(c) Every such notification shall also be accompanied by a statement of the commercial justification of the proposal, including a detailed statement of cost and details of the extra annual income accruing from the proposal;
(d) Within the four month period the director may direct the credit institution to refrain from implementing the proposed increases.
In the case of proposed new customer charges the same procedure shall apply, save that the prior period of notification and response by the director shall be three weeks.
In exercising his powers under Part XII of the Act, the director shall have regard to the promotion of competition; the proposed commercial justification adduced; the capacity of the credit institution to avoid the passing on of any costs to its customers, and the effect on customers or group of customers of any proposed increase in existing charges or the introduction of a new charge.