Joan Burton (Dublin West, Labour)
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Question 136: To ask the Minister for Finance the extent to which ECB interest rate reductions in recent months have been passed on to customers with credit cards or personal loans; the steps that have been taken to ensure that interest rate reductions are passed on to these borrowers; and if he will make a statement on the matter. [20348/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The decision on pass through of ECB rate reductions to customers with credit cards or personal loans is a commercial decision for the financial institution concerned. This decision will reflect a range of different factors including funding costs, market conditions, profitability and business strategy, the risk profile of the consumer, whether the loan is secured or unsecured as well as the competitive environment overall. The Deputy will appreciate it is a core function of the Board and senior management of each institution to assess where the appropriate balance lies between these competing objectives particularly in ensuring the financial health and commercial viability of the relevant institution. It is not an appropriate role for the Minister for Finance to seek to determine this decision making by financial institutions operating under competitive market conditions.

The Central Bank publish monthly statistics on interest rates, however these do not include advertised rates for consumer credit or credit cards. The latest available data relate to March 2009. This data indicates that between September 2008 and March 2009:

· Rates on new variable-rate consumer loans fell by 3 percentage points. Rates on new fixed-rate consumer loans fell by 0.7 percentage points.

· Rates on overdrafts declined by 1.4 percentage points. (This category includes some credit card volumes, but balances and rates are not separately identified.)

· Mortgage rates for new variable-rate customers fell 2.4 percentage points. The average rate for existing customers fell by 2 percentage points.

As part of its consumer information role the Financial Regulator provides cost comparison surveys on its personal finance website www.itsyourmoney.ie. The areas covered by these surveys include borrowing & credit. The banking cost comparison surveys, including credit card and personal loans are maintained on an always up-to-date basis. Within these surveys, features that are important to consumers, and in particular, those which have an influence over a purchasing decision (such as cost of credit) are highlighted prominently.