Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

Cuirim fáilte roimh an reachtaíocht seo a cuireadh os ár gcomhair inniu. Táimid ag fanacht leis an Bhille seo anois ar feadh tamall maith agus tá an triúracht ag cur brú ar an Rialtas ag iarraidh seo a thabhairt isteach. Níl amhras ar bith ann ná ceann de na lochtanna móra a bhí ann le blianta fada ná nach raibh a leithéid de sheirbhís ar fáil. Bhí seirbhís phríobhaideach ann agus ní raibh mórán dualgas ar na bainc agus na hinstitúidí airgeadais difriúla a bhí mar pháirt den tseirbhís sin. Bhí daoine leagtha taobh amuigh, daoine in ann míúsáid a bhaint as ná fáil thart ar an chóras.

I welcome the Bill which represents a positive contribution to the restoration of confidence in the banking system and addresses some of the serious deficiencies in the absence of a centralised credit register. Matters were left to the private sector, which led to many deficiencies, as previous reports indicated. It is to be welcomed that these deficiencies are being addressed. There has been a significant delay in bringing forward the legislation and the troika has insisted on its implementation. When will the provisions become operational and people be able to access their information? What is the position on existing information that the banks hold through the Irish Credit Bureau? Will the data be transferred automatically or will there be two concurrent registers, one in the private and other in the public sector? I hope we can tease out some of these questions on Committee Stage. Nevertheless, I welcome the Bill.

We are living through a crisis which was caused, in part, by reckless lending. We have seen that the financial sector requires strict rules and monitoring at all times. Sinn Féin supports any measure that will lead to more a responsible lending culture. If the Bill achieves nothing more than removing from the banks the possibility of their relying on an excuse for reckless lending, it will be worth supporting. It will also be worth supporting if the new register helps banks to lend more confidently to the small and medium enterprise sector.

When speaking of banks, we are conscious that the public has bailed them out. Through this Government and the previous Government, the public has pumped vast billions of euro into the banks to get them up and running to deal with the legacy of the past. Still, the banks are not lending in sufficient volume to the small and medium-sized enterprises. From the debates on Fianna Fáil's Private Members' motion on mortgage distress this week and on Sinn Féin's Private Members' motion three weeks ago, we know the banks are not doing enough and are, in some cases, making the situation worse for those struggling with mortgages.

The register will be a mainstay in the coming years for the decision-making procedures of lenders, which is to be welcomed. I will refer later to the lending threshold that enables lenders to avoid taking the register on board. Borrowers must be aware the register exists. Much personal financial data will be stored here and it is important that citizens are aware it exists. They should also be aware of what the data is, what the implications are for their credit history, that their credit history is available to other lenders, local authorities, the likes of NAMA and hire purchase companies, and the type of information on the register.

We must also inform people that they have the ability to access the information. Information held by the banks on customers' credit histories was proven to be inaccurate. Some banks deemed customers to be in default or in arrears when that was not the case. We hear about banks making mistakes, such as overcharging on interest rates or making mistakes on credit histories. Any system operated by humans will always make mistakes, so it is important that the public has full knowledge and can access information. A proper information campaign is necessary. It is not just a case of educating borrowers to know that financial institutions hold this information but also of allowing people to access the information so that they can ensure the information is correct.

The National Consumer Agency stated that the Irish Credit Bureau is not well known among consumers. Its successor must be different in this regard. I welcome the fact that a statement will be issued to people every year. That will go part of the way, but we must go further. How will the level of knowledge about the register be raised? This must be taken on board and, alongside the legislation, a campaign is necessary.

We have debated the mortgage arrears resolution process, MARP, and we are all aware of the figures. One quarter of domestic households with mortgages are in distress and there have been increases over the past number of quarters. It is a very depressing story for those in mortgage arrears of more than 90 days. Hopefully we will see a reduction and a reversal of the trend in the near future. We have been clear that in some cases there must be write-downs. I welcome the statement by David Duffy, CEO of AIB, on the need for write-downs. This is the first time the CEO of a bank has spoken about the write-down of debt. I have been very critical of bankers in the past but Mr. Duffy has been bold enough to take steps other banks have not taken in terms of remuneration. Although some may argue this has not gone far enough, he is breaking new ground by talking publicly about the need for debt write-down. We hope that will be followed up on a case-by-case basis where merited and where it is clear the loan is unsustainable.

The question about the legislation is how the register will affect those in arrears or those who will be slipping into arrears in the future. What safeguards exist to ensure consideration is given to those whose circumstances have changed because of the current economic collapse or a future economic collapse? What safeguards exist for those who have fallen ill and those who have disruptions in their lives? Section 14 allows for a 200-word statement to be placed on the record. However, it is important that this is not just left to the individual. People do not think like that. When dealing with the bank when a loan has fallen into arrears, people may tell the bank manager that they are ill and the bank manager may give them breathing space. However, the information may not be relayed to the register, and when the customer applies for another loan, a three-month gap will be shown. It should not be left up to the individual. If it is, it is important that we stress the option of the 200-word statement on the customer's circumstances. There are questions about where people stand at present and how to ensure the Bill does not blacken them further in respect of availing of new credit just because of a blip in their history.

There is potential for abuse of the register. It is important that the credit register is nothing more than a credit register. There are always fears, although sometimes ill-founded, that it will morph into something else. This may mean legislation should be tightened so that the register is used only for assessing consumers' suitability for credit and not for other services such as insurance. If the legislation is not tight in this regard, it is conceivable that some people will find themselves blacklisted from other services. There are also concerns in respect of utility services. It all depends on how it will be structured. Hire purchase is included this year, but people will have concerns as financial companies start to provide services and as we start to privatise water services. I ask the Minister to ensure safeguards are included so that insurance is not encompassed in this. I hope the Minister is open to amendments to ensure the legislation is tighter and more robust.

There is also a question about how the register will be configured to stop creditors from using the information to chase businesses or target people in marketing exercises. The Minister said the register would be subject to data protection provisions but it is important that this measure is robust and watertight so there is no abuse of information. Reference was made to what other jurisdictions do with the information held in these registers. This should be examined on Committee Stage.

I welcome the fact that consumers will receive one free copy of their record every year. Perhaps the Minister will explain whether it is automatic or upon request. If it is automatic, it will heighten awareness of the facility, but if it is on request we will also need an information and awareness campaign. Very few people know about the Irish Credit Bureau. One of the banks made mistakes about people's credit histories and then people became aware of the Irish Credit Bureau. People can check credit histories at a cost of €6. There will be a cost for a second copy of the record, which people will look for if they are concerned about inaccurate information. It is important that costs be kept to a minimum. A cost will be incurred by sending out copies of the records, but consumers should not be put off by the financial cost of applying for records.

This will be hosted on an ICT system and will be an electronic system. Banks will not post pieces of paper for every credit application above €500.

I presume this will be done through digital or electronic copies. Are there plans to allow access to this through a secure network? For example, if I want to log on to my bank account in Bank of Ireland, I type my PIN code into my iPhone. I got my PIN through a secure system in the past and I am able to access the details of my car loan and of my mortgage and the balance in my bank account, if there is one. Is it planned that consumers would be able to tap into a system such as that using an individual PPS number, as mentioned in the legislation, and an individual tracker? A person could apply for a unique code and sit at a computer to obtain information without a cost to the service, because he or she would not be posting things out and tying staff up trying to pull down records and so on. There would be a unique record there which they could access through IT and move into the modern age.

It is also interesting that the new register will come under the control of the Central Bank of Ireland. There are questions in regard to the resources of the Central Bank of Ireland to maintain and manage this register. I understand the legislation contains an option, or the Central Bank of Ireland has within its powers at this point in time the option, to outsource the management of the register. The question that really needs to be answered at this stage is whether that is the intention of this legislation - that is, that the Central Bank of Ireland would outsource this register. That raises concerns in regard to data protection, although it would be governed by the same data protection laws. There is that fear, whether right or wrong, when such information goes to a private company for profit, that it is not as secure. Are we taking something away from the private sector and then selling it back to it, although the private sector will charge us to maintain it? Is this just shifting it about or will it definitely be located, managed and fixed within the Central Bank of Ireland and not outsourced?

It is appropriate to raise at this stage the concerns I have about the policy of the Central Bank of Ireland in regard to the outsourcing of different systems. Last week the Minister confirmed in a parliamentary reply that the IT system of the Central Bank of Ireland will be outsourced. I am not an IT specialist but I am concerned about this. The cost of the tendering process is estimated at €150,000, including the cost of legal advice and assistance with the complex contract. What this means is that all internal traffic will now go through the base of a private company, Hewlett Packard. Our communications with the ECB will be managed by Hewlett Packard and our e-mail systems will move to and be administrated by Hewlett Packard staff. All e-mail traffic will go through the Hewlett Packard network.

The Society for Worldwide Interbank Financial Telecommunication, SWIFT, will be moved to the Hewlett Packard data centre. This is the financial payment system for moving large sums of money around. SAP, the system used for internal financial control, will also move to the Hewlett Packard data centre and will be administered by Hewlett Packard staff. Application servers that run the various applications used by the Central Bank of Ireland to carry out its various functions will all be moved to the Hewlett Packard data centre and be administrated by Hewlett Packard staff. Databases are at the heart of the Central Bank of Ireland and they contain all the information the bank applications use. These will also move to the Hewlett Packard data centre and be administered by Hewlett Packard staff. Network services, domain controllers, DNS servers, DHCP servers, monitoring servers, etc., will all move the Hewlett Packard data centre and will be administered by Hewlett Packard staff, who are private sector staff.

While most of these systems will ported to Hewlett Packard servers, including firewalls, we are not simply talking about Hewlett Packard staff looking after the hardware. Hewlett Packard staff will provide full level 2 and 3 support on the systems. They will be the domain controllers and the database administrators, and will have full control of the system. All of this is currently located in the Central Bank of Ireland. It is secure and it is not outsourced to any private company, so staff fulfilling these roles will be moved to different jobs where access is required. Central Bank of Ireland staff will have user access and must request any changes from Hewlett Packard staff who will then, through their change control process, carry out the changes.

The reason I raise this is that this type of transfer to the private sector does not happen in any other European country, but we are doing it on a massive scale. We saw the debacle with Ulster Bank, which outsourced some of its IT system and could not get the payments of approximately one million customers on the island of Ireland up to date in an appropriate time. We are giving away very valuable information, or the hardware behind it, and all the elements I mentioned, and outsourcing them. That causes concern to people. It might cost-effective today but information held by the Central Bank of Ireland is deeply sensitive and should be controlled within the bank.

That takes me to my next point, which is that this register should not be outsourced to a third party for profit. It will contain very sensitive information and it should be held and managed in-house. Whatever resources are required should be assigned to the Central Bank of Ireland to deal with that.

The issues I raise relate to a number of headings but, again, I very much support this Bill. I refer to the thresholds mentioned. We have two basic thresholds of €500 and €2,000. An application for credit of €500 or less does not have to be reported to the register. For anybody applying for €2,000 or more, the bank must go to the register to see the credit history. The question will always be where one draws the line. One does not want to make it too bureaucratic for banks but we need to ensure people do not evade the system.

The real issue is in regard to moneylenders, an issue about which I feel very strongly. I brought legislation before the House to curb the interest rate that moneylenders can apply to individuals. The moneylending system has grown dramatically in recent years. We know they are making house-to-house calls and rolling over loans. This is happening in every county in this State and it needs to be dealt with, although it involves a small amount of money.

Deputy Michael McGrath spoke about reducing the €2,000 threshold to €500, but I do not think that will deal with this issue, because moneylenders generally lend €500 or less. If one goes on to any of their websites, one will see the type of money they are lending is €250 or €500. If moneylenders are lending on average below €500, the moneylender is not required to report it to this system because it is below the €500 threshold. There is a genuine issue there. To my knowledge, people do not usually apply for a €2,000 loan from moneylenders, so the moneylender would not have to go to the register to check it out.

If somebody is heavily indebted with bank debts, credit union debts and hire purchase company debts, his or her details will be on this register, which will show that he or she is heavily indebted. Moneylenders can call to his or her door and offer a loan of between €250 and €500, which is what is on their websites, but do not have an obligation under this legislation to report it to the register, which is a problem. I am not saying all moneylenders are wrong, because there is definitely a role for them, but in a regulated way and definitely not in a way that allows them to charge 188% APR, go door to door and pretend they do not know that people are up to their eyes in debt because they do not have to check their credit history. That must be dealt with. I do not know if we could include another section to deal with those who issue smaller loans.

Moneylenders do not give out the larger loans. I ask that we consider this on Committee Stage.

I support the Bill and commend the Minister on introducing it. I hope to make amendments on Committee Stage to improve its efficiency. The designated purpose of the Bill is one that Sinn Féin supports wholeheartedly. I hope there will be a constructive debate on Committee Stage that will deal with some of the concerns over data protection, outsourcing, moneylenders and the reporting of disruptions to one's life. While a person can have a note applied to the register, will it actually be done? Is there a greater onus on the banks to include the notice first and foremost while still giving the consumer an opportunity? I hope to tease out some of these matters further on Committee Stage.

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