Written answers

Wednesday, 1 June 2005

Department of Finance

Financial Services

8:00 pm

Photo of Dinny McGinleyDinny McGinley (Donegal South West, Fine Gael)
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Question 23: To ask the Minister for Finance if he has taken any action on foot of a report by the One Parent Exchange Network highlighting the difficulty of lone parents in accessing financial services at a reasonable price. [18347/05]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I welcome the publication of the One Parent Exchange Network's report which highlights the difficulties lone parents can face in relation to debt and accessing financial services. The report provides a valuable insight into an ongoing problem facing some sectors of society that this Government, in conjunction with the financial regulator, is committed to resolving.

The main obstacles facing lone parents in accessing financial services are identified in the report as being lack of financial knowledge particularly in relation to initiating the transaction and the need to provide suitable identification documents in order to open an account.

In regard to customer identification, the law requires financial institutions to clearly establish the identity of their customers in order to counteract money laundering activities. Guidelines issued in this regard and approved by the money laundering steering committee under the aegis of my Department, set out as good industry practice the measures that might reasonably be expected of credit institutions. They also state that any measures adopted should not deny a person access to financial services solely on the grounds that they do not possess certain specified identification documentation. For its part, the financial regulator has also repeated this as a requirement in its draft consumer protection code.

I am informed that the Irish Bankers' Federation has recently undertaken to communicate with its members in order to ensure that staff are reminded of procedures for opening an account and the accompanying identification requirements and will also continue to liaise with the financial regulator on this issue.

The report also highlights the barriers those in the low income bracket may face in understanding the differing nature of financial products. The Minister for Social and Family Affairs, whose Department sponsored the publication of this report, has recently met the Irish Bankers' Federation and the Irish Payment Services Organisation to discuss ways in which those in the low income bracket could access financial services.

As far as improving financial knowledge is concerned, the financial regulator with its statutory consumer mandate has developed a number of specific initiatives to help consumers make informed choices in terms of the financial products they choose, the amount of risk they take on and the cost of the financial products. These initiatives have been developed through the framework of the financial regulator's "It's Your Money" campaign and have involved publishing consumer guides on credit products, fact sheets, cost surveys on personal loans, all of which are intended to assist borrowers in making the most appropriate credit decisions given their circumstances. The financial regulator has also published a fact sheet entitled, How to Open a Bank or Building Society Account.

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