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

I move amendment No. 43:

In page 48, between lines 22 and 23, to insert the following:“ 'debt collector' means a person who for remuneration collects or seeks to collect consumer credit debt;”.

This deals with debt collectors, as does amendment No. 70. Debt collectors are currently unregulated and need to be brought into the fold. Recently the Society of St. Vincent de Paul warned of a potential money lending crisis as more and more people turn to them to make ends meet. Some research suggests that half of households go into debt to pay regular bills.

As the Minister of State knows, I introduced proposed legislation to cap the extortionate rates of interest moneylenders charge. We know some APRs are up to 187%. Many people will end up in the hands of debt collectors, as distinct from moneylenders, who remain unregulated.

The Central Bank's code of conduct on mortgage arrears looks set to remove the limit on the frequency with which borrowers in arrears may be contacted by lenders. The Free Legal Advice Centres pointed out in their submission on the review of the code that the Central Bank should immediately prioritise the regulation of debt collection on a statutory basis, with a proper licensing system and a code of conduct applying to such entities. A suitable vehicle for this might be the Bill before us today, which was referred to the select committee on 26 October 2011. It is curious that a Bill ostensibly designed to improve the regulation of financial service providers by the Central Bank should have been allowed to stall in this manner. The core sentiment of the Free Legal Advice Centres is that the activities of debt collectors must be regulated and this is the appropriate legislation in which to provide for same.

My amendment No. 43 proposes the inclusion in section 57(b), which provides several definitions of terms referred to in the legislation, of a definition of "debt collector". I welcome the inclusion of debt management firms within the regulatory remit of the Central Bank, but there is no reason debt collectors cannot be regulated in the same way. The inclusion of the definition in this section will empower the Central Bank in that regard.

Amendment No. 70 deals with the fees charged by debt management agencies. Section 62 of the Bill gives the Central Bank the power to impose on a person who is authorised to carry out the work of a debt management firm "such conditions or requirements or both as the Bank considers appropriate relating to the proper and orderly regulation and supervision of debt management firms". That is very much welcome. Also welcome is the provision that the Central Bank may direct that person "not to carry on the business of a debt management firm for such period (not exceeding 3 months) as is specified in the direction". My amendment seeks, in addition, to empower the Central Bank to direct a direct management agency to publish the fees and charges it proposes to apply to its customers.

I referred to moneylenders in the context of an earlier amendment. The Central Bank requires all moneylenders to publish their fees and charges, which are made available on the bank's website. This intent of this amendment is to empower consumers by ensuring they have as much information as possible. It does not seek to create any obligation, rather it simply provides another way in which the Central Bank may choose to direct a debt management agency. I have dealt with cases in which people have moved from tracker to variable-rate mortgages, for instance, because they did not read the documentation they were given or did not understand the conditions set out therein. This is about empowering consumers by requiring debt management agencies to publish their fees and charges in a transparent way.

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