Margaret Cox (Fianna Fail)

I am glad to have an opportunity to speak about financial regulation. In recent years, this House has had many debates on the banking sector, including bank charges and the way in which banks do business generally. The largest financial institutions in the State operate a near-monopoly position whereby they all seem to offer the same services at the same cost. It is unfortunate that there seems to be no sense of competitiveness between the financial institutions. If one examines these institutions, one finds there is very little difference between them. We ought to be concerned about that because of their power over the ordinary man or woman in the street.

I saw a particular example of this power quite recently when I was doing some work for a constituent who was having difficulty in making mortgage repayments. The constituent managed to get everything sorted out and wanted to pull a number of loans together in order to re-mortgage the entire amount. He was able to show through earnings and other income that he was in a position to manage the repayments. We had a meeting with the bank but it was not interested in re-mortgaging the deal with this individual. The bank was only interested in advising the person to go elsewhere with his business but if he did so, he would have to repay all the loans in three months. The bank had promoted these loans to the individual as a solution and had driven him to this position, yet it was now absolving itself of responsibility. The institution to which he was referred, said that if he got things in order in three months, it would examine the matter.

The kind of power that banking organisations have over people's everyday lives is nothing short of scandalous. The abuse by certain institutions and by certain managers in certain locations, indicates their overriding objective in doing business is to make a profit. I manage a business and I accept that profit is important but if profit is king and nothing else matters then it is a sad state of affairs. The business sector has a responsibility to the community and to the society in which it operates. Making generous, fancy donations in terms of sponsorship to the People in Need Telethon, the Special Olympics etc., does not absolve one from the need to operate business in a fair and equitable manner for the benefit of everyone in the State, namely, shareholders, employees and customers.

On many occasions in this House we talked about credit cards and the exorbitant interest rates charged. In this State they charge the highest interest rates in Europe on outstanding balances at the end of the month. Many people are not aware that even if one makes the minimum payment at the end of each month with certain institutions, one still pays interest on the entire balance. Making the minimum payment merely reduces the capital owed, but makes no impact on the interest. Interest still has to be paid from the beginning of the month, even if one has made a payment during the month. This sort of small print which we do not notice on our credit card bills is not acceptable. Nor is the arrival every six or nine months of a letter which urges a person to sign up for more credit regardless of a person's credit history, in cases where it may be obvious that an increasing balance shows the person is not able to use the facility in an appropriate manner. What is going on? Is there no conscience involved? When one eventually tells the institution that one is having difficulties, it suggests converting the debt into a long-term loan, which is cheaper. Of course it is cheaper, because the institution has inflated the interest charges in the beginning. One then gets a call from some other institution urging one to transfer the credit balance and offering a six-month interest-free period. This is not fair.

We have also seen loans being provided through ATM machines. One might be stuck in town on a Saturday afternoon or night, spending money, and it is suggested there is no problem because one can borrow through the ATM machine. There is no-one at hand as one's voice of conscience. There is huge encouragement to borrow more money. It takes a very strong individual to withstand that constant bombardment of "buy now, pay later" and the urge to continue to buy. Because of Ireland's banking system one does not have to worry about paying later, because the banks make so much profit from selling one money continually, without conscience. That is not acceptable.

Consider the actions the banks are taking among various communities. We have talked about this in this House over a number of years. The issue has gone off the boil, yet banks are closing rural branches all over the country and are cancelling services. They cancelled the mobile banking service in Connemara recently because it was not making money. They say they have installed ATM machines and that facilities have been made available in branch offices in Oughterard and Clifden. If one lives in Rosmuc, however, one might have to travel 20 miles on public transport to lodge one's few euro. Nor can one cash a cheque these days. The bank in effect says it cannot possibly hand over one's money from one's own bank account, if one arrives with a cheque. The cheque must be lodged first. In certain circumstances, if it is drawn on the branch that one attends, one might get the money immediately. If the money is drawn on another bank however, or another branch of the same bank, one just has to wait for it to be cleared. The bank then holds one's money, making no apologies, while making obscene amounts of profits. The bank has no conscience regarding its overall objective as a realistic and proper part of the community.

Financial regulation is vitally important, but banking culture must change. We cannot continue to allow the banking industry to abuse the power it has in our community, society and economy. We need to say "stop". I welcome IFSRA and I expect and hope it will do a good job. I commend what it has already done. It has a difficult job. It is for us, the public, the bank customers and shareholders, to make it clear to banks that we will not accept an abuse of power in an industry in which we invest.