Dáil debates

Thursday, 22 September 2022

Ceisteanna Eile - Other Questions

Banking Sector

11:30 am

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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102. To ask the Minister for Finance the discussions that he and his Department have had with the Central Bank in respect of an extension of the timeframe for banks (details supplied) exiting the market here; and if he will make a statement on the matter. [46296/22]

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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The Minister may recall I have been raising with him constantly in this House the difficulties arising for customers of KBC Bank and Ulster Bank due to their exiting the State. As he will be aware, the Border region areas, such as Cavan-Monaghan, had a heavy reliance on Ulster Bank, which had a great network of branches in the past that, unfortunately, diminished big time. The exiting of these banks from the State, in particular Ulster Bank, creates further difficulties for people in areas such as mine, where there will be a significant diminution in the level of financial services available. Furthermore, of course, people are meeting ongoing difficulties in setting up new accounts with other financial institutions.

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I thank the Deputy and acknowledge that he has been raising this issue with me from the beginning, at the moment when concerns began to develop regarding the future of Ulster Bank. Given the importance of that bank in the communities he represents, he has raised this issue regularly with me in the House.

As he will be aware, while I deeply regret the decision made by Ulster Bank and KBC, I do not have a role to play in the operational decisions they are making. Nevertheless, this is a matter of great focus for our Central Bank and the Department, and we are engaging regularly on this matter with the banks that are withdrawing. Representatives of both banks are meeting my officials at least monthly and providing information to the Department of Finance regarding account closures. My Department is also engaging regularly with the Central Bank of Ireland, the Competition and Consumer Protection Commission and the Banking & Payments Federation of Ireland to ensure a cohesive and orderly approach to this issue. Both banks are providing their customers with six months’ notice to close their accounts and have committed not to close any branches this year.

The advertising campaign that is under way, which is prominent and has a high profile, is reminding consumers of what they need to do. As for the progress made, on 9 September, the Central Bank released statistics on account change, which indicated that 24% of the current and deposit accounts that were open at the beginning of the year in Ulster Bank and KBC had been closed by the end of August. That points to the efforts that are under way to deal with this matter in a careful way. I want the remaining banks to have the resources in place to deal with the account migration that is under way.

I assure the Deputy the Central Bank and my Department will continue to monitor the matter closely because it is a very big project that matters deeply to those consumers and bank users that will switch bank.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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I thank the Minister. His Department and the Central Bank have had more engagement with stakeholders since we debated this issue early in the process, and I welcome that. He stated that at the end of August, only 24% of customers had closed their accounts, which means 76% of people had yet to do so, with only 40% of the timeframe remaining. It is not practical to think this process of migrating huge numbers of accounts will be completed by the end of April next year. I accept that the Central Bank, which is in consultation with the two banks, cannot issue an edict, but it has to discuss what is realistic and what will happen. The last thing we need to see is accounts being closed automatically because people have not been able to meet the deadline. I know some very IT-literate people who could not transfer their accounts and set up new ones online. Some of them sought and got meetings in banks. Individual officials in various financial institutions have been helpful when people have got appointments, but the banks have not provided the additional personnel to their branches that they promised to provide. One bank quoted the number of additional staff it has taken on but it did not itemise the fact that a considerable proportion of those people were working abroad and not at branches in our State.

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I agree that while 24% is a big change versus where we were earlier in the year, there remains a great deal that needs to be done. Nevertheless, while that means 76% of the accounts are still open, that does not mean all those accounts are still active. More than 600,000 new accounts have been set up in the three remaining banks, which points to consumers responding back to getting their accounts in order and getting ready to make the change.

I take the Deputy's point. We need to ensure that AIB, Bank of Ireland and PTSB do all they can to have the staff ready. I am aware of the concerns raised about this. At least one of the banks is planning to be open for four Saturdays in a row to get ready for this change, which shows the work that is under way, but the Central Bank and I will continue to engage in this matter because it is the biggest change to happen for many consumers of banking services in Ireland for a long time.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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In the consultation the Minister and the Central Bank will have with the banks, I urge ongoing contact with the Financial Services Union, which has a great overview of what is happening at branch level and throughout the State. I compliment John O'Connell and his colleagues in the Financial Services Union on their advocacy on behalf not just of their union members but of the public in general in regard to banking and banking services.

The Central Bank has indicated that staffing within the banks is not adequate and has questioned how realistic the timeframe is. The Irish Farmers Association also has concerns. A large number of farmers will get payments from the middle of October and many of them do not have their new accounts in place. Similarly, Age Action Ireland has expressed concerns about people who have not had the opportunity to become familiar with IT and who are not able to open accounts on a personal basis. These are issues on which the Central Bank and the Department need to keep a constant eye and vigilance.

I appreciate the Minister's ongoing support on the matter.

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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There are indeed important issues we need to monitor and play a role in. The Minister of State, Deputy Fleming, has reminded me of the role our credit unions can play in also providing new services and accounts to people who are former customers of the two banks that are leaving. I am very much aware of the point the Deputy made about how not everybody is able to access services digitally and through the use of IT, and I have information regarding the work the various banks have done to provide telephone numbers and helplines for customers who may be vulnerable or who may be experiencing the kind of difficulties to which he referred. I will not take up the time of the House in reading out the telephone numbers but they are available. Customers have a responsibility and need to play their role in getting ready for this change but so do the banks, the Central Bank of Ireland and my Department, and we will certainly play our role.