Seanad debates

Wednesday, 28 January 2015

Commencement Matters

Bank Charges

10:30 am

Photo of Denis LandyDenis Landy (Labour) | Oireachtas source

I, too, welcome the Minister of State and thank him for coming.
I have proposed this matter because of the concerns brought to my attention. At this time of year, after Christmas, people examine their finances and the charges and fees they pay. I conducted some research and there is a wide variance in the charges of the main banks. There is nothing wrong with this. The banks provide products and services and seek to attract customers based on their model of service provision. However, there is something wrong when people are not notified adequately of the charges being foisted on them and there is no justification for some of the charges. This has been a subject of discussion in the Lower House. Questions were asked about it recently and I do not know whether it was the Minister of State or the Minister for Finance, Deputy Michael Noonan, who answered them.
The Minister of State will be aware that the issue is governed by section 149 of the Consumer Credit Act 1995 which requires that “Each credit institution shall, within three months, notify the director of all charges imposed by it in relation to the provision of any service to a customer or to a group of customers”. When the process has occurred, under subsection (5)(a), the director may require a credit institution “to refrain from imposing or changing a charge in relation to the provision of a service to a customer or to a group of customers, without the prior approval of the director”.
Despite the responses given in the Lower House to Deputy Michael McGrath on a specific issue regarding AIB's 25% increase in the cost of iBusiness Banking in 2014, it is clear that there is a provision to prevent such charges, if the director in the Central Bank decides the charges are too high and too much of an imposition on businesses. We are not using the legislation. There was a review and new legislation, the Central Bank (Supervision and Enforcement) Act 2013, was passed. However, the Act did not introduce changes to the section I have detailed. In a reply to a parliamentary question in the past couple of days the Minister said, "low customer mobility may mean that banks can increase prices without fearing loss of customers." This seems to be the nub of the issue.
I have a list of the various charges of the main banks. They charge a variety of fees for the provision of a duplicate statement, from zero to €2.50, €3.80 and €3.81, while one bank charges €5 per page. In anyone’s language, this is an inordinate charge. Retail customers cannot view account statements more than three months old. Instead, they must contact the bank and incur charges. While we say we are keeping an eye on this issue and that there is provision to prevent such charges, the proof of the pudding is in the eating. Given that whenever one makes a transaction on one's account one pays for it, the reason for maintenance charges on accounts is beyond me.

It is beyond me as to why it is necessary to charge to maintain an account.

Two institutions offer free banking.

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