Michael McGrath (Cork South Central, Fianna Fail)
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266. To ask the Minister for Finance if the Central Bank has received complaints or carried out investigations in relation to business loans in which the person is of the view they were wrongly removed from an interest rate linked to Euribor or were denied the option of reverting to a rate linked to Euribor following a period on a fixed rate; and if he will make a statement on the matter. [47039/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I have been informed by the Central Bank due to the confidentiality requirements imposed by domestic and EU legislation, which provides for confidentiality of information relating to ongoing supervision and limits disclosure to circumstances specifically provided for in Section 33AK of the Central Bank Act 1942, the Central Bank cannot comment on individual interactions with regulated entities or release supervisory information regarding any regulated entity.

Small and Medium-Sized Enterprises who are customers of lenders are protected under the SME Regulations, including the right to make a complaint.

On 18 December 2015, the Central Bank published  the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 (the Regulations). A small number of technical amendments were made to the Regulations in June 2016, the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) (Amendment) Regulations 2016 were published. TheseRegulations came into effect and apply to regulated entities, except credit unions, since 1 July 2016.  For credit unions the Regulations came into effect on 1 January 2017.  The Regulations replaced the existing Code of Conduct for Business Lending to Small and Medium Enterprises 2012.

The Regulations state that in good time before a borrower is bound by a credit facility agreement, the regulated entity shall provide the borrower with information in a durable medium including : “terms and conditions applying to the credit facility agreement together with the relevant fees, charges and interest rates which will apply to the credit facility agreement including an explanation of the basis for calculation of the interest charge”.

In addition, regulated entities must, at least once a year, provide a borrower with a statement which must, where applicable, include the interest rates charged.  Where the enterprise is a ‘micro and small enterprise’, a regulated entity must also inform a borrower of any change in the interest rate and the notice must inform the borrower -

(a) of the date of the change to the interest rate,

(b) of the payment amount after the entry into force of the new interest rate and, if the number or frequency of the payments changes, particulars of the changes,

(c) that the borrower should contact the regulated entity if he or she anticipates difficulties meeting the change in repayments, and

(d) where the change in interest rate arises as a result of a change in the interest margin on a credit facility, of the details of that change.

Where the enterprise is a medium-sized enterprise, the regulated entity must inform a borrower of -

(a) any change in the interest rate where the change in interest rate arises as a result of a change in the interest margin on a credit facility, and

(b) the details of that change.

The Regulations also set out requirements which must be complied with by regulated entities in relation to offering borrowers the option of a review meeting on an annual basis, to include a review of credit facility agreements.

If a consumer is concerned or unhappy with how they have been dealt with by a firm regulated by the Central Bank, there are clear processes in place in the Regulation for handling complaints.  The Central Bank encourages consumers who are dissatisfied with their experience of financial products or services to ensure that they communicate their complaint directly to their financial services provider. This ensures that their complaint receives the protections provided by the Regulations.