Brian Lenihan Jnr (Dublin West, Fianna Fail)

Amendment No. 10 relates to section 16(3)(a), which the Minister introduced in the Dáil to address concerns in this area. The subsection addresses the points raised in Senator John Paul Phelan's amendments, without trespassing on the jurisdiction of the courts. The new subsection provides that where a financial institution acts in bad faith by commencing legal proceedings to frustrate the actions of the ombudsman, he or she can still deal with the complaint. This provision goes as far as we reasonably can, without risking a legal challenge on the constitutional prerogatives of the courts.

The Bill states a consumer is not entitled to make a complaint if the conduct complained of has been the subject of legal proceedings. If a financial institution takes court proceedings to recover an amount allegedly due from a customer, there is nothing in the subsection to suggest this should prevent the customer from complaining to the financial services ombudsman that, for example, the institution had mis-sold the financial product concerned.

The spirit of the Senator's amendment is that it is important that legal proceedings cannot be used by financial institutions to prevent, delay or hinder the ombudsman from carrying out his or her duties. The Minister made an amendment, which went as far as he felt he could go constitutionally to address that concern.

Amendment No. 11 relates to dispute resolution and credit unions which have made reasonable efforts to use fully the dispute resolution options available to a consumer as a member of the union. This is an important issue for the credit union movement. Section 57BX(1)(c) lays down a general principle that before the ombudsman can consider a complaint, the consumer must have given the financial service provider concerned a reasonable opportunity to deal with it, as should be the case. The aim is that the financial service provider should avoid causes for complaint and, where complaints are made, make an effort to deal with them in a way that is satisfactory to its customers.

I expect the ombudsman council to further define what is meant by "reasonable efforts". It will want to ensure reasonable time limits are set for an institution's internal review of a complaint so that their is no undue delay from the consumer's point of view in having an unresolved complaint dealt with by the ombudsman. The same general principle applies to all financial service providers, including credit unions. I reiterate the assurance I gave in the other House that credit unions fall fully within the protection of section 57BX(6) and they are entitled to insist their members should exhaust their internal complaint procedures before recourse can be had to the ombudsman.

Unlike other financial institutions, considerable detailed provisions are in place for credit unions and they have been advanced in this respect. The financial services ombudsman will always have the right to review the regulations to ensure they are satisfactory but an arrangement is in place with credit unions and, subject to a review by the ombudsman, it will meet the requirements of the legislation. I give that assurance to the credit union movement. Every effort will be made to settle a dispute internally. If a consumer is not happy with the way a credit union has dealt with a complaint, he or she should have the same right as the customers of other financial institutions to have it addressed by the ombudsman within a reasonable period.