Thursday, 1 March 2007

Ceisteanna (22, 23, 24, 25, 26, 27, 28, 29, 30)

Ciarán Cuffe

Ceist:

14 Mr. Cuffe asked the Minister for Social and Family Affairs if the Money Advice and Budgeting Service has a role to play in investigating high levels of interest being charged by financial institutions, in view of its practical expertise in the area. [7927/07]

Amharc ar fhreagra

Gerard Murphy

Ceist:

18 Mr. G. Murphy asked the Minister for Social and Family Affairs when he will publish new legislation on the Money Advice and Budgeting Service; and if he will make a statement on the matter. [7971/07]

Amharc ar fhreagra

Kathleen Lynch

Ceist:

21 Ms Lynch asked the Minister for Social and Family Affairs when the promised new legislation to place the Money Advice and Budgeting Service on a statutory basis will be published; the principal areas in which it will differ from the Bill published in 2002; and if he will make a statement on the matter. [7905/07]

Amharc ar fhreagra

Brendan Howlin

Ceist:

35 Mr. Howlin asked the Minister for Social and Family Affairs the progress made in regard to his consideration of the research commissioned by the Financial Regulator and the Combat Poverty Agency on the nature and extent of debt incurred by low income families; and if he will make a statement on the matter. [7903/07]

Amharc ar fhreagra

Brendan Howlin

Ceist:

64 Mr. Howlin asked the Minister for Social and Family Affairs the latest position with regard to his discussions with representatives of the credit union movement with a possible view to providing additional credit options for low income families; and if he will make a statement on the matter. [7904/07]

Amharc ar fhreagra

Kathleen Lynch

Ceist:

66 Ms Lynch asked the Minister for Social and Family Affairs if, in regard to his interview on TV3 on 24 October 2006, progress has been made by his Department in regard to the preparation of legislation to make it illegal to charge exorbitant interest rates to low income families; and if he will make a statement on the matter. [7906/07]

Amharc ar fhreagra

Gerard Murphy

Ceist:

67 Mr. G. Murphy asked the Minister for Social and Family Affairs, further to Parliamentary Question No. 83 of 14 December 2006, if his Department’s officials have finished their consideration of the Financial Regulators report (details supplied); their conclusions in relation to same; the action he will take as a result; and if he will make a statement on the matter. [7972/07]

Amharc ar fhreagra

Brian O'Shea

Ceist:

72 Mr. O’Shea asked the Minister for Social and Family Affairs the latest support he has given to the Money Advice and Budgeting Service in view of the concerns expressed by the organisation that they are being swamped with requests for advice; his views on the increasing levels of personal debt among Irish families; his further views on whether the structures and organisation of MABS require reform to cope with these new circumstances; and if he will make a statement on the matter. [7911/07]

Amharc ar fhreagra

Simon Coveney

Ceist:

89 Mr. Coveney asked the Minister for Social and Family Affairs the meetings he has had and progress he has made with banking institutions in relation to making low cost and basic banking facilities available to low income customers as recommended by the Financial Regulator report (details supplied); and if he will make a statement on the matter. [7973/07]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Family)

I propose to take Questions Nos. 14, 18, 21, 35, 64, 66, 67, 72 and 89 together.

The Money Advice and Budgeting Service (MABS) provides assistance to people who are over-indebted and need help and advice in coping with debt problems. There are 52 independent companies nation-wide operating the service. The credit union movement has been a key partner in MABS since its inception and their involvement and support is central to the development and success of the service. Other voluntary and statutory bodies, such as the Society of St. Vincent de Paul, the Community Welfare Service, Citizens Information Centres, Centres for the Unemployed and local authorities work closely with the programme.

In 2001 MABS dealt with some 9,000 new clients. In 2006, it provided services to some 12,500 new clients and the number of active cases at the end of the year was some 14,900. The growth in demand for the service can be attributed to the increase in the availability of credit generally and to the quality of the service provided by MABS advisors.

In 2006, €16.4 million was provided to fund the service and in 2007 I have further increased the annual allocation to €17.67 million to assist the MABS in dealing with its workload.

The issues that give rise to problems of over-indebtedness for people are highly complex. The cost and availability of credit for people on low incomes and the barriers they face in accessing mainstream and cheap forms of credit add to the difficulties these people encounter in managing their finances. I am particularly concerned about the unacceptably high level of interest rates currently being charged by some financial institutions, loan companies and by legal moneylenders in situations where people have no alternative sources of credit available to them.

I have held discussions with a number of groups including the Irish League of Credit Unions, the Irish Bankers Federation and the Financial Regulator about these issues. The outcome of these consultations, the Combat Poverty Report, ‘Financial Exclusion in Ireland — An Exploratory Study and Policy Review' commissioned by the Financial Regulator, together with the statistical data now emerging from the new MABSIS information system will make a significant contribution to our knowledge about the problems of debt in Ireland. They will inform the strategies that need to be put in place by both Government and the providers of payment services such as the Banks and Credit unions to promote greater financial inclusion in Ireland.

I plan to bring proposals to the Government shortly to establish the MABS on a statutory basis. My proposals for legislation will build on the best features of the MABS model of service to the public and will include measures to address concerns about excessive loan charges for people on low incomes. The proposals will combine a continuation of local voluntary involvement with strong national leadership and ensure a high quality, coordinated budgeting and advice service for the future, in particular for people on low incomes. The proposals for the new legislation will take account of the significant developments which have taken place in MABS since the previous Bill was published in 2002.

The proposals entail a number of specific actions to address some of the issues that leave people on low incomes vulnerable to high cost credit charges. While the regulation of money lending comes under the Consumer Credit Act, 1995 and the licensing of moneylenders is a statutory responsibility of the Financial Regulator, my view is that the MABS has a key role to play in informing the licensing process in these circumstances. Officials of my Department are working closely with the Financial Regulator and with the Department of Finance on the detailed legislative provisions required to give MABS an input into these matters.

This work is nearing completion and I plan to bring the proposals to Government shortly. They will be informed by the consultations I have had with a range of individuals as well as the expert views of key MABS interests including money advisors, MABS voluntary boards of management and other stakeholders such as the credit union movement. The new legislation will take account of best practice in corporate governance for a customer focused service that provides value for money for the taxpayers investment and meets the challenges posed by the rapidly changing face of debt in 21st century Ireland.