Thomas Pringle (Donegal South West, Independent)

I welcome the opportunity to contribute to the Second Stage debate on the Central Bank and Financial Services Authority of Ireland (Amendment) Bill 2011. It would have been unusual to hear a Member of Fianna Fáil being praised in this House during the past few days. However, I congratulate Deputy Michael McGrath on his introduction of this legislation which makes perfect sense in the current climate.

The role of Financial Services Ombudsman was established in 2005. There is no doubt that the Financial Services Ombudsman has had a positive impact on customer relations in the financial services sector countrywide. Since 2007, there has been an increase of more than 62%, which is massive, in the number of complaints made to the ombudsman in regard to financial services. It is interesting to note that during this period the number of complaints against the banking sector which were not upheld increased from 66% to 74%, which indicates the positive role of the ombudsman in changing behaviour within the banks which are now responding properly to complaints. One in every four complaints made during the past year was upheld. Given the increasing volume of complaints this means an increasing number of complaints are being upheld by the ombudsman. It also indicates there are still cultural and transparency problems within the banks.

In 2009, the then Financial Services Ombudsman requested that the Minister for Finance provide him with the powers to name institutions against which he had made findings, the number of complaints received, the findings for and against and the value in monetary terms in that regard. This proposal has been with the Department of Finance since 2009. It has taken action on the part of Deputy Michael McGrath, who introduced this Bill, to get the Government to accept that the system needs to change and that legislation to ensure this happens is introduced.

This legislation will be vitally important in terms of driving the cultural change required within the banks. Deputy Stephen Donnelly stated in his contribution last night that the banks are among the least trusted institutions in this country and across the world. Only 9% of people trust the banks to deal with them in a fair manner, which shows the real problems in our banking system and the need for a cultural change. We learned some years ago through the DIRT inquiry of over-charging by the banks. This issue still remains to be addressed. Banks appear to view their customers as a soft touch rather than people who make them successful. They choose to screw the people whenever they can and to get what they can out of them.

Reports were carried in the media during the past few days of banks selling insurance policies to people who would not qualify for payment under those policies should they need to call them in. This shows that the banks are continuing to missell products. There needs to be a massive cultural change in our banks. This legislation will go a long way towards forcing that cultural change. It will probably result in positive competition within the banking sector as banks compete to ensure as few complaints as possible are made against them to the ombudsman.

I give a guarded welcome to the Minister's response to the legislation. I note that he stated the financial service providers could view such provisions as disproportionate and unfair, which coming from the banks is rich. I am concerned that the Department will swallow up this legislation and that following the Second Stage debate it will remain on the Order Paper and make no further progress. The Minister should rely on the Financial Services Ombudsman to engage with financial service providers and should ensure this legislation is enacted as quickly as possible to ensure a cultural change in our banks.

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