Written answers

Thursday, 26 March 2009

Department of Finance

Financial Services Regulation

4:00 pm

Photo of Ciarán LynchCiarán Lynch (Cork South Central, Labour)
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Question 56: To ask the Minister for Finance if he proposes to bring forward legislative proposals relating to the management of consumer debt; his views on whether the legislative framework is satisfactory in this regard; if, in particular, his Department has considered the implementation of UK models such as individual voluntary agreements or debt management plans; if new legislation would be required for the implementation of such models in an Irish context; and if he will make a statement on the matter. [12303/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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As far as safeguarding the interests of individual borrowers is concerned, the function of Government is to provide an appropriate legislative framework for effective and efficient regulation of the financial services sector. Much progress has been made in this regard over recent years, through such measures as the establishment of the Financial Regulator and the Financial Services Ombudsman and the publication of the Financial Regulator Consumer Protection Code (CPC) in August 2006.

The CPC, which came into full effect from July 2007, represents a major step in promoting the interests of consumers in that it obligates the regulated entities that it covers to act in the customer's best interests, to seek appropriate information about the customer, to ensure that the products and services provided are suitable for the consumer, to treat their customers fairly and have adequate procedures in place to handle complaints. These obligations are additional to the statutory prior information and warnings required under the Consumer Credit Act, 1995.

The Financial Regulator has prioritised the provision of information for consumers about the potential risk of excessive debt and has also drawn attention to the need for consumers to choose the right type of loan for their needs. It has also 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 financial products.

General issues relating to the enforcement of debts are for other Ministers. I understand that as part of the Law Reform Commission's Third Programme of Law Reform, it will shortly look into the area of legislation concerning debt enforcement. Any conclusions arising from the Law Reform Commission's work will of course be carefully considered by the other Ministers.

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