Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 73:

In page 33, before section 44, but in Part 6, to insert the following new section:
“44.—Part V of the Central Bank Act 1997 is amended by the insertion of the following after section 36:
“36A.—The Bank shall be the authority in the State for the authorisation of debt management advisors.
36B.—It shall be an offence for a company registered or operating in the State or any other person or partnership operating in the State to act as a debt management advisor, or to claim or to hold themselves out to be a debt management advisor, in the State or outside the State unless it is acting under and within the terms of an authorisation to do so under sections 36C or 36D.
36C.—(1) Subject to the provisions of this Act, the Bank may grant or refuse to grant to any person or partnership or company applying to it under this section an authorisation to operate as a debt management advisor.
(2) The grant of an authorisation under subsection (1) of this section may be given unconditionally or it may be given subject to such conditions, including conditions limiting the duration of authorisation, or requirements or both as the Bank considers fit.
(3) Whenever the Bank refuses to grant authorisation to a proposed debt management advisor under this section it shall serve notice on the proposed debt management advisor of its intention to refuse to authorise it and stating the reasons therefore, and the proposed debt management advisor may within 21 days of receipt of such notice appeal to the Court against the decision.
(4) An application for authorisation under subsection (1) of this section shall be in such form and contain such particulars as the Bank shall specify from time to time and, without prejudice to the generality of the aforesaid, shall include such particulars or information as the Bank may request in relation to:
(a) the type of business to be carried on or likely to be carried on by the proposed debt management advisor;
(b) any person or persons having a qualifying shareholding or having control or ownership of the proposed debt management advisor including any natural or legal person whose shareholding or other commercial relationship with the proposed debt management advisor might influence the conduct of the proposed debt management advisor to a material degree; and
(c) if the proposed debt management advisor is a company, the Memorandum of Association and Articles of Association of the proposed debt management advisor.
(5) A proposed debt management advisor shall not be authorised by the Bank under this section unless—
(a) if it be a company, that it be incorporated by statute or under the Companies Acts, or is incorporated outside the State;
(b) if it be an unincorporated body of persons, that they be governed by a partnership agreement;
(c) if it be a sole trader, that he or she satisfies the Bank as to the probity and competence of the sole trader;
(d) if it be a company or partnership, that it satisfies the Bank as to the probity and competence of each of the directors and/or managers and/or partners of the company or partnership;
(e) it satisfies the Bank as to the suitability of each of its qualifying shareholders;
(f) it provides to the Bank details of the proposed fees and charges that it will impose for the provision of debt management advice;
(g) it provides to the Bank a current Tax Clearance Certificate; and
(h) it provides whatever other information that the Bank deems is appropriate for the purpose of assessing the probity and reliability of the debt management advisor.
(6) A proposed debt management advisor shall be informed whether or not authorisation has been granted—
(a) within two months of the date of receipt of the application or within two months of the coming into operation of this section, whichever is the later, or
(b) where additional information in relation to the application has been sought by the Bank, within a period of two months after the receipt by the Bank of the additional information or the period of six months after the receipt of the application, whichever is the sooner.
(7) The Bank may impose conditions or requirements or both on an authorised debt management advisor which is constituted as a partnership or sole trader, in order to achieve an equivalent level of supervision to that pertaining to an authorised debt management advisor which is constituted as a corporate body.
(8) It shall be an offence for a proposed debt management advisor or any other person to apply for authorisation under this section knowingly or recklessly using false or misleading information, or knowingly or recklessly making false or misleading statements, in relation to an application for an authorisation under this section.
(9) On receipt of its authorisation from the Bank, an authorised debt management advisor shall, prior to entering into any agreement to provide debt management advice to a consumer, present to that consumer for whom it is providing debt management advice a copy of the authorisation granted by the Bank.
36D.—(1) A person who is a debt management advisor on the day immediately prior to the coming into operation of this section and who is not deemed to be authorised under section 36C may stand authorised, on the coming into operation of this section, as an authorised debt management advisor until the Bank has granted or refused authorisation to it provided that, no later than two months after the coming into operation of this Part, it applies to the Bank under section 36C for authorisation, and, in that section, references to a proposed debt management advisor shall be construed accordingly.
(2) Pending a decision by the Bank to authorise a debt management advisor to whom subsection (1) of this section refers, or during the two months referred to in subsection (1) of this section, or during both such times, the Bank may do all or any of the following, namely:
(a) impose such conditions or requirements or both as it thinks fit relating to the proper and orderly regulation and supervision of the debt management advisor or in relation to the protection of consumers,
(b) issue directions under this Act.
(3) A person to whom subsection (1) of this section refers may appeal to the Court against the conditions or requirements imposed under this section. On hearing an application under this subsection of this section, the Court may confirm, vary or rescind any condition or requirement imposed under this section.
36E.—(1) The Bank may revoke the authorisation of an authorised debt management advisor where—
(a) a request is made to it to do so by the authorised debt management advisor, or
(b) an authorised debt management advisor—
(i) has failed to operate as a debt management advisor within twelve months of the date on which it was authorised under this Act, or
(ii) has failed to operate as a debt management advisor for a period of more than six months, or
(iii) if it is a company, is being wound up,
(c) it is expedient to do so in the interests of the proper and orderly regulation and supervision of debt management advisors or in order to protect consumers,
(d) an authorised debt management advisor or one of its directors and/or partners has been convicted on indictment of any offence under this Act or any offence involving fraud, dishonesty or breach of trust,
(e) circumstances have materially changed since the granting of the authorisation such that if an application for authorisation were made at the time when the circumstances had materially changed, a different decision would be taken in relation to the application for authorisation,
(f) the authorisation was obtained by knowingly or recklessly making false or misleading statements, or by knowingly or recklessly using false or misleading information,
(g) an authorised debt management advisor has systematically failed to comply with the condition or requirement of this Act,
(h) an authorised debt management advisor no longer fulfils any or all of the conditions or requirements which were imposed when the authorisation was granted or which were subsequently imposed,
(i) an authorised debt management advisor becomes unable or, in the opinion of the Bank, is likely to become unable to provide any proper or reliable debt management advice to consumers.
(2) The Bank shall publish notice of revocation of an authorisation of an authorised debt management advisor in Iris Oifigiúil within fourteen days of such revocation.
(3) Where the Bank revokes an authorisation of an authorised debt management advisor, the debt management advisor may apply to the Court within twenty eight days of such revocation for an Order varying or setting aside the revocation on such terms as the Court thinks fit.
36F.—(1) The Bank shall administer the system of regulation and supervision of debt management advisors in accordance with the provisions of this Act in order to promote—
(a) the maintenance of the proper and orderly regulation and supervision of debt management advisors, and
(b) the protection of consumers.
(2) Where the Bank is of the opinion that it is necessary in the interests of assessing the capacity of an authorised or proposed debt management advisor to provide debt management advice, it may commission an independent assessment of the capacity of the proposed debt management advisor or the authorised debt management advisor.
(3) Subject to subsection (4) of this section, the Minister may, after consulting with the Bank, prescribe by regulation the fee to be paid to the Bank by a proposed debt management advisor or by an authorised debt management advisor supervised by it and the Minister may prescribe different fees for different classes of debt management advisors.
36G.—(1) Without prejudice to the powers of the Bank to impose conditions or requirements or both under this Act, and, without prejudice to the powers of the Bank under subsections (2) or (3) of this section, where the Bank considers it necessary to do so in the interests of the proper and orderly regulation and supervision of debt management advisors and for the protection of investors, the Bank may give a direction to any or all authorised debt management advisors or any or all proposed debt management advisors in relation to any matter related to the operation of the provision of debt management advice.
(2) Without prejudice to the powers of the Bank under subsection (1) of this section, and without prejudice to the powers of the Bank to impose conditions or requirements or both under this Act, where the Bank is of the opinion that it is necessary to do so in the interests of the proper and orderly regulation and supervision of debt management advisors or for the protection of investors or both, the Bank may give a direction in writing to the debt management advisor concerned to suspend for such period (not exceeding twelve months) the provision of any debt management advice.
(3) Without prejudice to the powers of the Bank to impose conditions or requirements or both under subsections (2) and (7) of section 36C, an authorised debt management advisor shall, upon engagement by a consumer, and before the provision of any debt management advice—
(a) advise the consumer in writing of the existence, role and function of the Money Advice and Budgeting Service, and
(b) set out in writing the fees and costs to be charged, in accordance with the debt management advisor’s authorisation, for the provision of debt management advice.
36H.—It shall be an offence for a debt management advisor to receive from or hold on behalf of a consumer to whom it is providing debt management advice any monies other than monies paid by the consumer for the provision of debt management advice.
36I.—(1) The Bank shall, after consultation with the Minister, publish a code of practice in relation to debt management advisors and the provision of debt management advice and it shall be a condition of authorisation of all debt management advisors that they shall comply with the terms of the code of practice.
(2) The Bank shall publish the code of practice concerning the provision of debt management advice within six months from the coming into force of this section.
(3) In drawing up the code of practice in relation to the provision of debt management advice, the Bank shall have regard to—
(a) the interest of consumers and the general public,
(b) the vulnerable position that debtors may find themselves in because of the significant decline in property values between 2006 and the date of coming into force of this Act,
(c) any submissions made by authorised debt management advisors.
(4) It shall be an offence for a debt management advisor not to comply with the Code of Practice published by the Bank.
36J.—(1) A person who contravenes sections 36A to 36H is guilty of an offence and shall be liable—
(a) on summary conviction to a fine not exceeding €5,000 or, at the discretion of the Court in the case of an individual, to imprisonment for a term not exceeding twelve months, or both, or
(b) on conviction on indictment, to a fine not exceeding €100,000 or, at the discretion of the Court in the case of an individual, to imprisonment for a term not exceeding five years, or both.”.”.

As the Minister knows this area relates to the regulation of firms offering debt-management services and debt advice. I am delighted this issue is finally about to be tackled. I would have liked to have seen it done some time ago. We published a Bill in 2011 addressing the regulation of this sector. It passed Second Stage, but did not progress further. I am glad it is now being done. I will keep my comments brief at this stage.

While the Central Bank does not have a full set of tools available to it at this point, it has nonetheless been very active in the area. I understand the number of firms offering such services has reduced quite significantly, not least because of the enforcement activity the Central Bank has undertaken. The sector has been squeezed. We all know of the cases that went so badly wrong with people unfortunately losing a lot of money including Home Payments Limited and a number of others. Many people relying on the services of such firms are quite vulnerable.

For a number of years we have needed this area to be regulated and monitored, especially where firms are handling people's money. Where people put their trust in firms to negotiate with their creditors and to handle their money there is a very strong onus on the Government to ensure that area is regulated and to introduce some transparency on fees. Through the years these companies often made great promises about what they could negotiate with their creditors to have debt reduced. People were paying into these firms and finding out subsequently that a good proportion of the money that went in went to the fees of the firms. I look forward to the debate. I am glad that this area will finally be regulated.