Seán Fleming (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

31. To ask the Minister for Finance his views on increases in bank charges and the consequent impact on personal and business customers; and if he will make a statement on the matter. [16175/14]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy is aware, bank fees, charges  and commissions are subject to regulation under Section 149 of the Consumer Credit Act 1995, as amended. Section 149 came into effect in 1996 and currently requires that credit institutions, prescribed credit institutions and bureaux de change must make an  application to the Central Bank if they wish to introduce a new customer charge or increase any existing customer charge in respect of certain services. Section 149 does not apply to interest rates; it applies to fees, charges  and commissions only.

As required by the Troika, my Department published a review of the regulation of bank fees and charges; the review is available on the website .

The review found that:

- net fee and commission income divided by average assets in Irish banks was well below the average of their peers; and

- net fee and commission are lower in the Irish banks than in their European peers relative to net interest income.

The review concluded that it would not be appropriate to repeal Section 149 at this time. The lack of competition in the banking sector means that the repeal of section 149 would give unfettered price setting power to the incumbent banks.  The report recommends that this issue should be revisited when competition in the banking sector has improved significantly.  It is my view that the current regulatory regime offers appropriate protection to consumers against unjustified increases in bank fees and commissions.