Terence Flanagan (Dublin North East, Fine Gael)
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Question 156: To ask the Minister for Finance the position regarding cost-based charges in the banking system (details supplied); and if he will make a statement on the matter. [15580/11]

Michael Noonan (Limerick City, Fine Gael)
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Under Section 149 of the Consumer Credit Act 1995 (as amended), credit institutions wishing to impose a new non-interest charge or increase an existing non-interest charge are required to notify these charges to the Central Bank. The Central Bank assesses each notification in accordance with the criteria laid down in legislation as follows:

the promotion of fair competition between financial service providers,

the commercial justification submitted in respect of the proposal,

the effect that new charges or increases in existing charges will have on customers,

passing on costs to customers.

The Central Bank has advised me that the financial institution in question has approval to charge an application fee/documentation fee of €63.49 for mortgages and leases. It is also approved to charge a duplicate statement fee of €3.81 for the first page and €2.54 thereafter.

If the borrower is not satisfied with his treatment by the financial institution and, assuming he is classified as a "consumer" for the purposes of the Central Bank's Consumer Protection Code (the Code), he may make a complaint to the financial institution using the formal complaints system. If the financial institution does not address his complaint to his satisfaction, he may refer the complaint to the Financial Services Ombudsman, who deals with individual consumer complaints. The Ombudsman will adjudicate on the complaint on the basis of the regulatory requirements on the financial institution. For the purposes of the Code a "consumer" is any of the following:

1. a natural person acting outside his or her business, trade or profession,

2. a person or group of persons but not an incorporated body with an annual turnover in excess of €3 million,

3. incorporated bodies having an annual turnover of €3 million or less in the previous financial year,

4. a member of a credit union.