Thursday, 15 July 2021
Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Bill 2021: Second Stage (Resumed)
Deputy O'Donoghue is on the way. I hope he will arrive on time as the debate is running slightly ahead of time.
The Rural Independent Group welcomes the Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Bill. The purpose of the Bill is to extend the Central Bank's "authorisation requirements to persons carrying on hire-purchase or consumer-hire business or providing credit indirectly and persons carrying on business relating to hire-purchase or consumer-hire agreements or the indirect provision of credit; to provide for the collection and publication of information on credit agreements, hire-purchase agreements and consumer-hire agreements; for those and other purposes to amend the Central Bank Act 1997; to provide for a limit on the interest rate that consumers may be charged under credit agreements and hire-purchase agreements; to provide for a requirement to include the annual percentage rate in a hire-purchase agreement; for those and other purposes to amend the Consumer Credit Act 1995 and to provide for related matters."
All this sounds good and we are supportive of it. However, we have banking institutions with meticulous procedures in place, including credit unions, which are stifled from doing serious business in the market. I know the Minister of State is looking into the area and a report is being drawn up but successive Governments have squeezed the credit unions out from competing with banks. This is an area in which we need the credit unions to compete and in which they want to compete but, because of dubious decisions made by successive Governments, it has not happened. This must end immediately.
Anyone who knows anything about the credit unions knows they have great relationships with the people who do business with them. It is one to one. You are not just a number; you are a highly respected customer. The managers of credit unions have meticulous and often incredible relationships with the people they know.
I met recently with representatives of credit unions in west Cork. Those businesses are in a healthy state. I met with management and board members from Skibereen, Clonakilty, Bandon, Dunmanway and Bantry. All of them, however, are facing a doomsday scenario if the Government does not allow them to do business. Why has the Minister of State, Deputy Fleming, like his predecessors, not allowed credit unions to provide proper mortgage facilities for people who want to get started in life? Why has this Government, like previous Governments, continuously stifled credit unions to the point where they are on the verge of going out of business? Are the larger banks wagging the tail in all of this? KBC Bank and Ulster Bank have waved goodbye to the Irish market and Bank of Ireland is closing branches throughout the country, including in Bantry and Dunmanway in west Cork. It is time for the Minister of State to wake up and smell the grass growing. The buddies the Government backed have let it down. If it does not look outside the box and encourage credit unions, as well as post offices, to compete in the banking sector, businesses will be in dire trouble in this country.
In fairness to the credit unions, they have been meticulous in the way they have looked after people down through the years, giving car loans, providing finance for people to do up their home and helping students to go to college. They build a relationship with people, often from the cradle to the grave. That type of relationship is not happening in the banking sector. When I go into a local bank, no matter where it is - sometimes I go into a branch in Dublin - I am pushed towards a machine. Customers are only a number and it is all about pressing buttons instead of the one-to-one relationship where you look the manager in the eye and do business with him or her. The men and women working in credit unions know their customers, their history and their family's history, and they know the customer will repay the loan.
There are great people in this country who are going through a difficult time at the moment. Great business people are going through incredible difficulties. A large number of publicans and restaurant owners, whose businesses have been closed now for 400 days, have told me they are in dire straits and finding it very difficult to get agreement from the banks that remain in the market. Those people are facing massive difficulties. My worry is that, in the coming years, their mortgages could be sold on to vulture funds because a word or two was changed in their agreement during this pandemic and they will not be covered. That will be brought to bear on them later on. The vulture funds in this country are well supported by the Government. We need to look seriously at this issue. Businesses that are in trouble through no fault of their own need a way to keep an honest cash flow going. I will be pushing very hard on this issue.
I do not want to take away from this Bill, because it is important and the Rural Independent Group is supporting it. The reality, however, is that I come from a community in west Cork, Schull, where we lost our bank and then, a year or so later, the local shop closed. Up to 30 jobs are gone. This shows what can happen in a community and the impact of it. It is the worry I have now for the people of Bantry and Dunmanway, who are losing their banks. What will be the outcome for those towns and their surrounds? People in rural areas always go to the town when they want to do a bit of banking and other business. It is hugely important that those businesses are supported.
It saddens me that the Government is standing idly by and washing its hands of any of the decisions that are being made by banks. When the banks got into trouble, the Government had to come to their aid and prop them up. Surely be to God, as a shareholder in those banks, with the status or whatever that confers, the State can give some support to the towns and villages of rural Ireland to ensure the banks located there will survive. We need to build up the credit unions and look at the post offices and what they can do in terms of rolling out finances and financial aid. Postmasters and postmistresses are desperate to get business flowing into their post offices. It is vital for their survival in rural towns and villages. The Government, however, has sat idly by and failed to support them or facilitate new business for them.
A system whereby post offices could provide a range of banking services needs to be considered. In the previous Dáil, the Rural Independent Group looked at how this business is done in other countries. There are models operating elsewhere that could be adopted very simply for post offices. I could see them working in places like Drimoleague, Kilbrittain, Kinsale, Bantry, Skibereen, Castletownbere, Schull and Goleen. All of these places need investment and a better banking structure. Some are very lucky to have credit unions, most of them have post offices but, unfortunately, they do not have the banks that are needed. Those banks have walked away and moved to a computerised system where you have to press a button on your telephone to get service. Nobody in the banks knows any of the customers or their history. For business owners, it is all down to an engagement between their accountant and the bank. The personalities are gone out of it because the bank manager located closest to you is probably 50 or 60 miles away and does not know the person he or she is dealing with.
In fairness to the Minister of State, he has been trying to engage with the post offices. Please God that will yield some success. The Rural Independent Group supports the Bill and I thank the Minister of State for bringing these proposals to where they are. People have issues and concerns in regard to loans. They want to feel comfortable about the loan they have. They need to know there are rules and regulations around it and that they are not dealing with unscrupulous individuals. If there are no rules and regulation, people are in danger of having their lives destroyed.
Unfortunately, we are coming into a very dangerous time for our economy. While there is a bit of cash flowing around, mainly due to the pandemic unemployment payment, that is going to dry up. I have been contacted by a large number of business owners who are incensed by the increase in various costs, particularly of fuel. As I said in the House last night, in some parts of west Cork, fuel prices have gone from €1.17 a litre 12 months ago to between €1.42 and €1.50 now. That is insane. Fianna Fáil and Fine Gael are going to drive those costs up further because it is the Minister, Deputy Eamon Ryan, who is wagging the tail. He is running the show and the other members of the Government are just saying, "Shove it on". They are shoving the costs onto the people of rural Ireland. People in rural Ireland are being attacked and they are feeling it. I spoke to a man last week who has 13 vans running as part of his business. He said he has plenty of business but he has to take some of the vans off the road because he cannot afford to keep them going. He has to fill them with fuel every week, even before he pays someone to drive them, and the price is getting higher all the time.
The Minister of State needs to wake up and smell the grass growing. He needs to go back out and engage with people in rural Ireland. He must invest in credit unions because they have the right people and the procedures and everything meticulously in place. I would appreciate if the Minister of State would concentrate on that. I have said it to him before and I will continue to say it. I am fighting for the ordinary people living in the communities in my constituency of Cork South-West.