Dáil Éireann Debate, Wednesday - 10 April 2024
21. Deputy Barry Cowen asked the Minister for Finance the measures he is putting in place so that future banking changes are managed in a controlled, fair and transparent manner for consumers; and if he will make a statement on the matter. [14273/24]
Amharc ar fhreagraThroughout recent changes to the banking sector, including the departure of two banks from the Irish market, the existing robust financial consumer protection framework has supported consumers of financial services in Ireland.
Notwithstanding the strong consumer protection framework in Ireland, the retail banking sector is subject to ongoing change. While some of this is driven by statutory and regulatory changes, many changes that affect consumers are driven by the industry itself as it introduces new products and services or withdraws older product and services. Industry can also change its service offering including in terms of bank branches and ATMs.
Where changes are introduced because of statutory or regulatory reforms, often through EU Directives and Regulations, it is a priority for me and my Department to put the consumer at the centre of our considerations during the negotiations.
We also make changes through domestic legislation that are expressly for the purpose of protecting the needs of consumers. In that regard, my Department is currently drafting the Access to Cash Bill to provide continued sufficient and effective access to cash and to ensure that the future of evolution of cash infrastructure is managed under a statutory framework in a fair and transparent manner for consumers.
I would like to thank the Joint Oireachtas Committee on Finance, Public Expenditure and Reform and Taoiseach for its quick production of its Pre-Legislative Scrutiny Report, which I will take into account in the drafting of the Bill.
The Deputy will be aware that the Access to Cash Bill arose following a recommendation in the Retail Banking Review. The Government approved and published the comprehensive Retail Banking Review in November 2022 and the implementation of its 34 recommendations, including on Access to Cash, are now Government policy.
As noted above, many changes in the banking sector flow from industry driven initiatives and changes. While decisions relating to the business model of regulated firms are commercial matters for the boards of those firms, the Central Bank notes that it expects firms to take a consumer-focused approach in respect of any decision that affects their customers. It is the responsibility of the individual banks to ensure that they are putting their customer first, ensuring fair treatment of customers and that customers understand what the changes mean for them.
In terms of consumer protections and future changes, the Central Bank is also currently undertaking a major review of its Consumer Protection Code (the Code). The aim of the Code review is to ensure an updated and modernised Code is in place which is centred around firms securing customers’ interests and delivering positive consumer outcomes. A public consultation process on the revised Code proposals will be open until 7 June 2024. Enhancements being proposed by the Central Bank in the revised Code include:
• increasing the minimum notice period for banks to six months where they intend to close, merge or move a branch and to four months where they intend to significantly change services in a branch;
• requiring banks to publish board-approved assessments of the impact of the changes on customers; and
• requiring banks to conduct an ex-post assessment to include a survey of impacted customers nine months after the change, which must be completed before 15 months has elapsed since the change.
Finally, the Central Bank (Individual Accountability Framework) Act 2023 was signed into law on 9 March 2023. The Act is designed to introduce greater personal accountability for persons in senior roles in financial services firms, to introduce conduct standards for all those performing controlled functions in the financial services sector and to contribute to the transformation of culture in the sector.
The Act significantly enhances the powers of the Central Bank to ensure that regulated financial service providers and those working for them act in the best interests of consumers and builds on the powers granted to the Central Bank under the Central Bank Reform Act 2010 and the Central Bank (Supervision and Enforcement) Act 2013.
The Individual Accountability Framework will drive positive changes in terms of wider banking culture, and enhanced accountability while simplifying the taking of sanctions against individuals who fail in their financial sector roles. It gives the Central Bank the regulatory tools necessary to ensure that consumers dealing with financial service providers in Ireland can be confident that their best interests will be protected.
The Act ultimately seeks to improve the culture of the financial sector and boost public trust in it.
