Denis Naughten (Roscommon-Galway, Independent) | Oireachtas source

I welcome the opportunity to speak briefly on this matter and to say we will support the amendment the Minister of State has tabled. I understand the complexity here is that the Minister of State has to come back before the House for its approval before the statutory instrument can be enacted. It would be useful if the same mechanism could be used regarding some of the Covid-19 regulations, some of which have contradicted themselves and the comments and information on the Government's own websites.

I want to focus on the responsibility of the Central Bank with regard to this matter. The briefing note provided to us assures us that this is about getting the right balance between the protection of consumers and accessing the information from the banks. My difficulty is that I believe there is a fundamental bias within the Central Bank. That fundamental bias is inherent in every interpretation by the bank on regulating and policing commercial banks in this country. While the Central Bank has a responsibility to protect the rights of consumers, its primary focus is on the stability of the financial system. It is important that we protect the stability of the financial system but the difficulty is that, at times, a call has to be made between the stability of the banks and protecting the rights of consumers. Unfortunately, when push comes to shove, the banks win out. I believe that this has to be addressed.

Up until the last decade, the consumer regulatory arm for financial services was separate to the Central Bank. They were amalgamated a number of years ago and I believe they need to be separated again. The assurances that the Minister of State will provide are undermined by having the consumer protection and banking regulatory aspects within the same organisation. The regulator, which is the Central Bank, stated in March of this year, before Covid-19 broke out, that the banks still lacked a consumer-focused culture. I believe that the culture is lacking not just within the banks, but within the Central Bank itself.

On 8 July, I outlined to the Minister for Finance an example of where consumers are being ignored by the Central Bank. I pointed out to him that a family with a mortgage of €300,000 that took a six-month break as a result of Covid-19 would face an interest bill of €4,300. The commercial banks were telling that particular family, which was struggling as a result of Covid-19, that they had no other choice but to continue to apply the interest rate to their mortgage, when the European Central Bank had said the opposite in that regard. The Central Bank here was behind in enforcing that.

We have seen the same with the headlines this morning with regard to motor insurers making profits of €142 million last year despite the fall in costs of settling claims. Premiums are going up but so are the profits of the insurance industry. We saw the same thing with the tracker mortgage, where the banks have effectively given the two fingers to the regulator. I fundamentally believe that we must separate the consumer protection aspect from the Central Bank and have it with a separate authority, whatever that authority is, so that the Central Bank is not making a judgment call about whether it supports and shores up the banks or protects consumers, because that should be a primary focus of the regulator.

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