Alan Shatter (Dublin South, Fine Gael) | Oireachtas source

I am generally in agreement with the sentiments expressed in the amendment. However, the Bankruptcy Act 1988 contains no prohibition on the holding of a bank account by a bankrupt, although many people believe it does. An individual's affairs are currently subject to scrutiny by the official assignee in bankruptcy and, in practice, financial institutions have not been enthusiastic to allow individuals in bankruptcy to open a new account for obvious reasons. I am exploring with the offices of the Attorney General and the Parliamentary Counsel whether I can impose what could be described as a positive right to open or continue to operate a bank account on financial institutions. If possible, I will bring forward a suitable Report Stage amendment.

The amendment makes reference to an individual debtor being guaranteed the right "to open and operate any bank account...provided by a banking institution". In circumstances where an individual is insolvent, a DSA or a PIA will be in place and it is envisaged that, over a period of years, various payments will be made to creditors. Under a PIA, mortgage repayments will be made to financial institutions while unsecured debt due to such institutions will be paid under a DSA. Clearly, it will suit the debtor and creditors, in particular, financial institutions to have money going into a bank account which is used to distribute payments. The notion that individuals may be forced to wander around handing out wads of cash in this day and age is bizarre.

However, there are a number of problems with the amendment. No financial institution is compelled to allow any individual, solvent or insolvent, to open an account. If there is a right to open an account, where will it be exercised? Will it be imposed on, for example, Bank of Ireland or AIB or will every financial institution be under an obligation to allow an individual to open at least one account where he or she can establish he or she has no current functioning accounts? What will be the nature of the account? If there was to be an account for an individual who is insolvent and a party to one of the new settlement arrangements, it would have to be what the Americans call a debit account. Our banks are suddenly recognising customers should have debit cards rather than Laser or credit cards. Up until recently, most people used Laser cards to get cash and credit cards but in the US, for many years, individuals have had access to bank accounts with no overdraft facility on which they have a debit card to make payments. That is the ideal account for an insolvent individual to ensure he or she does not again overreach and spend money he or she does not have.

There is merit in the amendment but it does not work as drafted because it is open to the suggestion that banks could be compelled to allow people to run current accounts with overdrafts at unspecified interest rates but we are in consultation with the Attorney General about this. There is a practical and reasonable need for individuals to have access to a debit account with no overdraft facility, which would facilitate both the making and receipt of payments, and I hope we can return to that issue on Report Stage.