I move amendment No. 299:
In page 62, before section 120, but in Part X, to insert the following new section:
"PART XI
OBLIGATION ON CREDIT INSTITUTIONS TO NOTIFY DIRECTOR OF ALL CUSTOMER CHARGES
120.—(1) Each credit institution shall, within three months, notify the Director of—
(a) all charges imposed by it in relation to the provision of any service to a customer or to a group of customers, and
(b) any term or condition upon or subject to which such service is provided.
(2) A credit institution shall notify the Director of every proposal—
(a) to change any charge, term or condition which has been previously notified to the Director under subsection (1), or
(b) to impose any charge, term or condition, applying to the provision of a service to a customer or to a group of customers, which has not been previously notified to the Director under subsection (1).
(3) Every notification under subsection (2) shall be accompanied by—
(a) a fee of £25,000, or such other amount as may stand specified for the time being in regulations, in respect of any proposal to
(i) impose or increase any charge, or
(ii) change any term or condition which in the opinion of the Director is detrimental to a customer or a group of customers,
(b) a statement of the commercial justification for the proposal including a detailed statement of costs, and
(c) details of the estimated amount of additional revenue accruing from the proposed charges.
(4) The Director may direct a credit institution—
(a) to refrain from imposing or changing a charge, term or condition, applying to the provision of a service to a customer or to a group of customers, without the prior approval of the Director, and
(b) to publish, in such manner as may be specified by the Director from time to time, information on any charge, term or condition applying to the provision of a service to a customer or to a group of customers.
(5) A direction under this section may be expressed to apply—
(a) to every credit institution or to credit institutions carrying on a specified type of banking or financial business,
(b) to all services provided to a customer or to a group of customers by Xedit institutions or to specified services or to services of a specified kind, or
(c) to a specified time or times or during a specified period or periods,
and the direction shall—
(i) (I) be communicated to every credit institution concerned, and
(II) where not communicated in writing, be confirmed in writing to every such credit institution concerned as soon as possible thereafter, and
(ii) have effect in accordance with its terms.
(6) The Director shall, in exercising his powers under this section, have regard to—
(a) the promotion of fair competition between
(i) credit institutions, and
(ii) credit institutions carrying on a particular type of banking or financial business,
(b) a credit institution passing any costs on to its customers or a group of its customers in proposing to impose or change any charge, term or condition applying to the provision of a service to a customer or a group of customers, and
(c) the effect on customers or a group of customers of any proposal to impose or change any charge, term or condition applying to the provision of such service.
(7) The Director may amend or revoke a subsisting direction under this section and may amend or revoke a subsisting direction which has been amended.
(8) The Director may exempt a credit institution from the obligation to notify the Director under this section in respect of—
(a) any charge which has been individually negotiated bona fidewith the credit institution by a customer, or by or on behalf of a group of customers, of the credit institution, or
(b) a class of term or condition applying to a service provided by the credit institution, if the Director is of the opinion that it is not necessary for it to be so notified in order to decide whether or not to issue a direction under subsection (3) in respect of the service.
(9) In this section, ‘charge' and ‘term or condition' do not include any rate of interest.".
The amendment is based, to a large extent, on the old section 28 of the Central Bank Act, 1989. Amendment No. 299 transfers responsibility for all transaction charges by credit institutions from the Central Bank to the Director of Consumer Affairs. In addition to charges by banks, the Director's remit will also extend to charges levied by building societies and other credit institutions. The Central Bank Act, 1989, applies to transaction charges levied by banks only.
The issue of transaction charges has been a contentious one for a considerable time. Increases in transaction charges or the introduction of new ones tend to give rise to a surge of both consumer and business anger at the uncontrolled proliferation of such charges and their apparent lack of transparency. There is also a perception that the examination by the Central Bank of proposals to increase charges is not overly rigorous.
In addition to the repeal of section 28 of the Central Bank Act, 1989, as proposed in amendment No. 303, our further addition to the proposed text provides for the levying of a fee of £25,000 for each application to increase or introduce a new charge. Such a fee will cover the additional associated costs to the Director of Consumer Affairs of investigating all future proposed increases in charges, as well as discouraging too frequent or frivolous applications.
The amendment tabled by Deputy O'Rourke seems to prohibit certain credit institutions from passing the cost of this fee on to their customers. Subsection 6 (b) of my amendment provides that the Director when exercising his powers should have regard to credit institutions passing any costs on to customers. Thus the Deputy's concern is already taken into account.