Michael McGrath (Cork South Central, Fianna Fail)
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48. To ask the Minister for Finance if he has satisfied himself with the Central Bank's response to a bank's placing of 2,141 SME customers into a global restructuring group (details supplied); his views on whether a formal review is required by the Central Bank to assess whether any SME customers here were inappropriately treated; and if he will make a statement on the matter. [9989/17]

Michael Noonan (Limerick City, Fine Gael)
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I am confident that legislative changes since the financial crisis have equipped the Central Bank with an array of investigative, regulatory and enforcement powers to ensure that regulated financial service providers adhere to the requirements of financial services legislation.  These changes include significantly enhanced powers for the Central Bank to gather information under the Central Bank (Supervision and Enforcement) Act 2013 which broadened the Banks' information gathering and authorised officer powers.

I am informed by the Central Bank that, while it cannot generally comment on interactions with regulated firms, Ulster Bank Ireland D.A.C. is engaging with the Bank in relation to this matter.  This is properly in line with the 2013 Act and its revised provisions for potential enforcement actions. 

On this matter, the Ulster Bank Chief Executive last week stated that RBS has announced a new complaints review process overseen by an independent third party, and, the automatic refund of complex fees to SME customers in Global Restructuring Group (GRG) in the United Kingdom and the Republic of Ireland between 2008 and 2013.  It is a matter for the Central Bank to determine whether it is satisfied with this approach and whether it will utilise its extensive powers under the 2013 Act.  I am sure that Deputies will note that the Central Bank is properly undertaking its enforcement role by the recent sizeable settlements in enforcement cases.

In addition to this enforcement role, the Deputy may be aware that the Central Bank is proactively regulating the financial system and has issued regulations aimed at protecting SMEs when dealing with regulated and unregulated loan owners, whose loans must be serviced by credit servicing firms under the Consumer Protection (Regulation of Credit Servicing Firms) 2015.  These strengthened Central Bank regulations include the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 which came into operation for regulated lenders other than credit unions on 1 July 2016 and, in the case of credit unions, on 1 January 2017.  These revised SME Regulations introduce specific requirements for regulated lenders, including:

- Contacting SME borrowers who have been in arrears for 15 working days;

- Warning SME borrowers if they are in danger of being classified as not co-operating; and

- Expanding the grounds for appeal and setting up an internal appeals panel.

Under these SME Regulations, regulated financial services firms must have a complaints handling procedure in place.  Any complaints against financial institutions should first be discussed with the institution concerned.