Gerald Nash (Louth, Labour)
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481. To ask the Minister for Finance his views on whether the section of legislation used by the Central Bank to investigate a transaction undertaken in 2014 by a consortium of staff at a firm (details supplied) only enables the regulator to pursue actions against staff of regulated firms once the facts have been found and an enforcement action against the firm concerned has been taken or a settlement agreement has been reached; if he plans to undertake a review of the relevant legislation; and if he will make a statement on the matter. [18526/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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Under section 33AO the Central Bank Act, 1942 (as amended) provides for the holding of an inquiry into a contravention of financial services legislation by a Regulated Financial Services Provider (RFSP). The participation link in this provision requires the Central Bank to first prove a contravention of financial services legislation against the RFSP before it can take an action against an individual.

As the Deputy is aware, the introduction of the Senior Executive Accountability Regime (SEAR) by means of legislation is a priority for this Government and work has been ongoing for some time on the details of the proposed legislative proposal. I envisage that the SEAR will require firms to set out clearly the roles and responsibilities of their senior executives including the production of Management Responsibility Maps documenting key management and governance arrangements in a comprehensive and accessible way. This should ensure that there is clarity as to who is responsible for what. The legislation will also include Conduct Standards for individuals and firms, giving the Central Bank additional powers to enforce obligations on financial services providers, and relevant individuals working within them, with respect to expected standards of conduct. The legislation will enhance the suit of powers that the Central Bank will have and as regards the Deputy’s specific query, The legislation will break the participation link to facilitate the Central Bank in taking action against either a firm or an individual where a contravention of financial services legislation occurs.

Gerald Nash (Louth, Labour)
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482. To ask the Minister for Finance if his plans to update the Central Bank code of practice to allow for impact assessments and 12-month consultation periods in which bank branch closures are considered; his plans to increase the bank levy; and if he will make a statement on the matter. [18527/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by the Central Bank that while decisions relating to the business model of regulated firms are commercial matters for the boards of those firms, the Central Bank expects them to take a consumer-focused approach in respect of any decision that affects their customers. The Central Bank expects that any decision by a board to close bank branches should be supported by an analysis and understanding of the impact the decision will have across its customer base.

Banks are required to notify the Central Bank when they intend to close, merge or move a branch. The Central Bank’s focus regarding branch closures is to ensure that banks adhere to the relevant requirements in the Consumer Protection Code 2012 (the Code) and how banks communicate the closures to their customers.

Banks must ensure that they communicate in a clear and timely way with customers regarding any such changes, including the closure of branches, and in particular inform them about any alternative channels available to them to avail of banking services. Banks must also provide affected vulnerable customers with the assistance necessary to ensure that those customers can retain full access to basic financial services, albeit in many cases at another branch location.

The Code sets out important requirements to ensure that consumers are fully informed of any closures or changes in services, and have time to make alternative arrangements. Under Provision 3.12 of the Code, any bank that intends to close, merge or move a branch 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.

When notification is received in accordance with Provision 3.12, the Central Bank engages with the banks to ensure the impact of the decision has been carefully considered across its full customer base and at the appropriate levels. The bank must ensure that its communications to customers are clear and transparent and that it seeks to assist vulnerable customers to mitigate the effect of the branch closure as much as possible.

The Central Bank is reviewing the Code and plans to publish a Consultation Paper in the summer on changes proposed to be made to the Code. This may include a review of the provisions of 3.12.

Funding Levies

The Funding Strategy and Guide to the 2020 Industry Funding Regulations sets out details of the Central Bank’s funding strategy. The recovery rates for costs up to and including calendar year end 2024 are contained in section 3.1 on page 7.

The Central Bank continues to progress its funding strategy which aims to:

(i) Increase the proportion of costs chargeable to industry and reduce the burden of subvention on the taxpayer, with the ultimate aim of regulated firms paying the full cost of financial regulation activity;

(ii) Adopt principles which support a predictable, transparent and proportionate pricing approach; and

(iii) Reduce complexity and risk in the areas of funding policy and execution.

In September 2021, industry will be invoiced for its share of 2020 costs and rates for each category are as follows:

All Banks 100% (2019: mix of 90% and 100%)

- Insurance 100% (2019:90%)

- Investment Firms & Fund Service Providers 100% (2019: 90%)

- Funds 90% (2019: 80%)

- Credit Unions 35% (2019: 20%)

- All other categories 75% (2019: 70%)