Michael McGrath (Cork South Central, Fianna Fail)
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66. To ask the Minister for Finance if small and medium sized enterprises are covered by the Central Bank's consumer protection code; and if he will make a statement on the matter. [21877/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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On consultation with the Central Bank, I can confirm that the General Principles of the Consumer Protection Code (the Code) apply in respect of all customers in the State, with customer defined as:

“any person to whom a regulated entity provides or offers to provide a product or service the subject of this Code, and any person who requests such a product or service”.

The other chapters of the Code apply in respect of customers in the State who fall within the definition of ‘consumer’. ‘Consumer’ is defined as either of the following:

- “ a person or group of persons, but not an incorporated body with an annual turnover in excess of €3 million in the previous financial year (for the avoidance of doubt a group of persons includes partnerships and other unincorporated bodies such as clubs, charities and trusts, not consisting entirely of bodies corporate); or

- incorporated bodies having an annual turnover of €3 million or less in the previous financial year (provided that such body shall not be a member of a group of companies having a combined turnover greater than the said €3 million).”

This includes where appropriate, a potential ‘consumer’.

Please note, however, that certain provisions of the Consumer Protection Code apply only to personal consumers, defined as

“a consumer who is a natural person acting outside his or her business, trade or profession.

However, the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 (the SME Regulations), were published in December 2015. Regulated lenders (other than credit unions) have been required to comply with the SME Regulations since 1 July 2016, and in the case of credit unions, from 1 January 2017. These Regulations replaced the existing SME Code.

The SME Regulations aim to strengthen protections for small and medium sized enterprises (SMEs) when borrowing from regulated lenders, while also facilitating access to credit. They also set out a framework which regulated entities must comply with when dealing with SME borrowers in arrears and financial difficulties. SMEs are enterprises which employ fewer than 250 persons and have an annual turnover not exceeding €50 million, and/or an annual balance sheet not exceeding €43 million.

The SME Regulations apply to regulated entities engaged in relevant activities in the State. For the purposes of the Regulations, a ‘regulated entity’ means a regulated financial service provider providing relevant activities. ‘Relevant activities’ include:

- Providing or offering to provide credit to a borrower or from which a borrower is seeking to avail of credit;

- Entering into, offering to enter into or with which a borrower has sought to enter into a credit facility agreement, to which a borrower is a party or will be a party;

- Proposing or undertaking preparatory work for entering into a credit facility agreement with a borrower and any related activities;

- Providing or offering to provide an alternative arrangement; or

- Engaging in credit servicing activities.