Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 6:

In page 18, between lines 12 and 13, to insert the following:

“Report by Central Bank on Buy Now Pay Later products 17. (1) The Central Bank shall, no later than six months following the date in which this section is commenced, present a report to the Minister for Finance examining Buy Now Pay Later products with particular reference to, but not restricted to -

(a) the current state of the Buy Now Pay Later products market including its component parts and recent changes in size and scale,

(b) possible trends and potential future pressures in the Buy Now Pay Later products market,

(c) to present an assessment of the benefits and harms evident or possible in the Buy Now Pay Later products market and those that may be expected as the Buy Now Pay Later products market develops,

(d) to compare international approaches, including regulatory measures, in response to the issues examined where relevant,

(e) make recommendations, as the Central Bank considers necessary or appropriate, to respond to the issues examined.

(2) The Minister shall, after receiving the report referred to in subsection (1), cause a copy of that report to be laid before each House of the Oireachtas.

(3 ) If the Minister does not accept any recommendation of the Central Bank in the report referred to in subsection (1), the Minister shall within one month of being presented with it prepare and lay before each House of the Oireachtas a statement of the Minster’s reasons for not accepting it.”.

This amendment follows on from what I said about other concerns around buy now, pay later finance. The amendment calls for the Central Bank, no later than six months following the date on which this section is commenced, to present a report to the Minister for Finance, examining: the buy now, pay later products in the market, with particular reference to but not restricted to the current state of the buy now, pay later products market including its component parts and recent changes in size and scale; the possible trends and future pressures in the buy now, pay later products market; to present an assessment of the benefits and harms evident or possible in the buy now, pay later products market and those that may be expected as the buy now, pay later products market develops; and to compare international approaches, including regulatory measures, in response to the issues examined where relevant; to make recommendations, as the Central Bank considers necessary or appropriate, to respond to the issues examined.

The amendment also calls for the Minister, after receiving a copy of that report to lay the report before each House of the Oireachtas. If the Minister does not accept any recommendations of the Central Bank in the report the Minister shall within one month of being presented with it prepare and lay before each House of the Oireachtas a statement of the Minster’s reasons for not accepting it.

I tabled this amendment because there has been a huge increase in the buy now, pay later, BNPL, market. Just as we have seen with PCPs, we are seeing a large increase in this type of market. Indeed, it is increasing exponentially. This market is of particular concern at a time of rising prices. When somebody goes into a shop and decides to buy a flat screen television on a BNPL basis, for example, the situation is that up to one third of younger individuals will miss payments and will be penalised. This has an impact on their credit rating. Across the water, an average of one quarter of all adults who use BNPL services have failed to pay on time and that goes up to 35% for those between the ages of 18 and 34. Those figures are truly shocking but that is what is likely to happen in our market too, with significant consequences. We need to be ahead of the curve in relation to this.

As I mentioned earlier, over four years ago I called for regulation in relation to PCPs. PCPs, which account for hundreds of millions of euro of credit, have been unregulated for the last number of years. This legislation, when it passes with the support of the Houses, will deal with that issue. The BNPL market is now being regulated as a result of this legislation and that is to be welcomed. However, there are further issues that need to be looked at in the context of the impact this will have on the provision of credit and on consumers, particularly those on lower incomes as well as those who are not necessarily on a low income but who are younger and are taking the easy option to have the commodity here and now and pay for it over a period of time. The evidence suggests that those payments are not running smoothly, that the penalties are significant and that debts are just handed over to debt collectors. Those debts spiral and people get into a cycle. What this amendment does is task those who are best placed to deal with this issue with looking at this market, at the growth in the market, the opportunities and benefits it presents, as well as the negatives and to respond back if they deem it appropriate. Maybe they will say that everything is fine but if not, they are tasked with making recommendations. Under this amendment the Houses of the Oireachtas is asking the Central Bank to do that work and report within six months. I strongly encourage the Minister of State to support this amendment because there is a boom in the BNPL market which is giving rise to serious concerns relating to rising consumer debt and the consequences that can flow from that.