Seanad debates

Thursday, 24 March 2022

Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Bill 2021: Second Stage


10:30 am

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank the various Senators who have contributed to this constructive debate and for their general overall support of the Bill. It is generally accepted there is a need to improve the regulatory framework governing the provision of PCP and BNPL types of finance to consumers. The provisions in this Bill are designed to ensure the Central Bank of Ireland consumer protection code and any other relevant Central Bank code or regulation can be applied to all the entities that provide credit, hire purchase and PCP agreements to customers, in addition to entities that service those agreements.

There were a number of interesting and useful contributions to the debate and, where necessary, the Department of Finance will give consideration to them in the future consideration of the Bill by this House. I look forward to that engagement. I thank all the Senators who have spoken, all of whom have supported the Bill. It is important to summarise what we are talking about. Many people know about personal contract plans, which are very important, especially in the car market, and would have been surprised these matters were not regulated up to now. The Tutty report, which some Senators referred to, was published in 2018. While it took some time to implement it, it is good it is happening now. It would have been lovely if it had happened earlier. It did not, but it is happening now. It has gone through the Dáil and I hope this House will also conclude this Bill very soon for further consideration on the next Stage.

The other important issue concerns the buy-now-pay-later people. If somebody buys a suite of furniture or a bed for €1,000 or €2,000, the payments can sometimes be spread over a period. Sometimes a third can be paid now, a third a month later and a third the month after that. Up to now, none of those loans have been captured by this legislation. Customers are not taking a loan from the shop in those instances. People say they have not signed an agreement, but these loans involve finance companies providing funding to shops to provide customers with finance to pay for goods on a staged basis and this is worked into the original purchase price. It is very important to capture what we call indirect credit, where a customer does not sign an agreement but is indirectly caught by an agreement because he or she purchased the goods. That is why it is important this Bill comes to the House now.

Another important point was made regarding moneylender legislation. In this legislation, we are dealing with firms that provide credit. The issue of moneylenders is dealt with in separate legislation that is currently working its way through the Oireachtas. We discussed moneylending legislation quite recently in the Dáil, which is different from this Bill. The important thing is that everybody wants to see the exorbitant rates charged by some of these moneylenders outlawed once and for all. This will be seminal legislation. It is different legislation. It was rightly pointed out that some of those companies are now charging up to 288% APR, which includes collection costs incurred by calling to houses to collect money. Collection costs will not be allowed to be a separate charge in future. The proposal in the moneylending Bill is that the 288% maximum charge will be reduced by 240% to 48%. It is still a high rate but this will be a dramatic, overwhelming and seismic change compared with where it was.

I thank all the Members. As I said, I look forward to returning to the House for consideration of this legislation as soon as the Members find time for it. I look forward to this Bill being passed in due course.


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