Thursday, 5 March 2020
Department of Finance
Bank Branch Closures
75. To ask the Minister for Finance his views on the ongoing closures of commercial bank branches nationwide; his further views on whether many persons, including the elderly, will be left without convenient commercial bank services; the steps he will take with the Central Bank to prevent further closures; and if he will make a statement on the matter. [2687/20]
The Deputy will be aware that the banking sector is experiencing a challenging operating environment and the traditional banking model has been under pressure for some years to adapt and deal with legacy issues. In such circumstances, cost management is likely to remain a high priority for banks as it is an area under their control.
However, branch closures are always a matter of regret, and I as Minister, would hope that closures are kept to the minimum necessary for financial sustainability. Notwithstanding this, I do expect that any bank closing branches will do everything it can to mitigate the impacts of the branch closures on local communities, including technology and the use of alternative means of service delivery.
I am advised by the Central Bank, that within its Consumer Protection Code 2012 (the Code) that there is a requirement that a regulated firm must not, through its policies, procedures, or working practice, prevent access to basic financial services. In addition, Provision 3.12 of the Code requires that banks make clear to consumers when they intend to close a branch, in order to allow consumers to make alternative arrangements if they so wish. When intending to close, merge or move a branch, the bank must:
1. notify the Central Bank immediately;
2. provide at least two months’ notice to affected consumers to enable them to make alternative arrangements;
3. ensure all business of the branch is properly completed prior to its closure, merger or move, or alternatively inform the consumer of how continuity of service will be provided; and
4. notify the wider community of the closure, merger or move in the local press in advance.
In line with the requirements of Provision 3.12, when the Central Bank is made aware of any branch closures, it engages with the regulated entity to ensure the impact of any decision regarding branch closures is carefully considered across its full customer base. The Central Bank expects that the regulated entity in question will provide affected vulnerable customers with all the assistance that is necessary to ensure that they retain full access to basic financial services, albeit at another branch location.
For those who are concerned that there is a lack of convenient commercial bank services in light of branch closures, I would like to draw your attention to the Indecon report on Community Banking in Ireland published by my Department in December 2019. The report concluded that there is extensive provision of banking services by credit unions, An Post, as well as by commercial banking providers in the Irish market.
The report found that there are 1,912 branches operated by banks, credit unions and post offices in Ireland, 63% of these branches are post offices or credit unions and 37% are banks. The Indecon report also demonstrates that there is a higher number of branches per capita in many of the counties where a significant percentage of the population resides in rural areas.