Tuesday, 13 October 2020
Department of Finance
105. To ask the Minister for Finance the steps he will take to assist families who are facing an inordinate number of direct debit and credit-related fees on top of account maintenance fees from banks and financial institutions at a time when they are facing severe financial hardship; and if he will make a statement on the matter. [30070/20]
All credit institutions in Ireland are independent commercial entities and the imposition of bank fees and charges are decisions to be made by the boards and management of individual banks which need to be run on an independent and commercial basis. You will be aware that, as Minister for Finance, I have no statutory role in relation to the charges applied by credit institutions. Under Section 149 of the Consumer Credit Act 1995 (the Act), as amended, the responsibility for the regulation of bank fees lies with the Central Bank of Ireland.
I am advised by the Central Bank of Ireland that under Section 149 of the Act, a credit institution must notify the Central Bank if they wish to:
- Introduce any new customer charge for providing certain services; or
- Increase any existing customer charge for providing certain services.
Each notification received by the Central Bank is assessed and robustly challenged in accordance with the specific criteria set out in Section 149 of the Act. Having considered the proposed charge(s) under the assessment criteria as set out under the legislation, the charges are either rejected, approved at lower levels than requested by the credit institution, or approved in full. Credit institutions are free to impose any pricing differentials for the service up to the permitted maximum and are free to waive charges at their discretion for commercial or competitive reasons.
Where a regulated entity intends to introduce new charges or increase any existing charges, under provision 6.18 of the Central Bank’s Consumer Protection Code, it must give notice to affected consumers of the introduction of any new charges or of increases in charges, specifying the old and new charge, at least 30 days prior to the charge taking effect. If customers are unhappy with their current account provider for any reason, including cost, they have the right to switch to a different provider. I would encourage all bank customers, particularly those adversely affected by changes in bank charges, to shop around and compare the fees and benefits of the different current accounts available. The Competition and Consumer Protection Commission (CCPC) website provides useful information to assist customers to compare and switch accounts; this website can be accessed at .
Under the Payment Accounts Directive, all Irish banks must make available a basic bank account for people who currently do not have access to a bank account. The basic bank account is free of charge for everyday banking services for the first year. After 12 months, the credit institution may review the amounts lodged to the account over the preceding 12 months, and, where the total of those amounts exceeds the equivalent of the national minimum hourly rate of pay multiplied by 2,080, the credit institution may charge a reasonable fee for the account. The consumer must be given two months’ notice before any such reasonable fee may be imposed.
The Payment Accounts Directivealso requires that a consumer must be provided with a Fee Information Document setting out all fees linked to an account, in good time before entering into a framework contract with a consumer. A consumer must also be provided, at least annually, with a Statement of Fees, setting out all fees incurred in respect of the account. These requirements ensure the consumer is fully informed of all fees linked to a payment account. Where a consumer wishes to switch payment accounts, the Central Bank’s Code of Conduct on the Switching of Payment Accounts with Payment Service Providers 2016sets out the requirements that both the existing and new account provider must adhere to when undertaking the switching process.