Louise O'Reilly (Dublin Fingal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

60. To ask the Minister for Finance the protections that are in place for consumers availing of buy-now, pay-later lending services; the oversight and monitoring of these providers that is carried out by the Central Bank; and if he will make a statement on the matter. [31256/22]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy will be aware, the Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Act 2022 has now come into operation. This Act provides that any person which directly or indirectly provides credit to consumers, including credit which is termed as 'buy now pay later' (BNPL) type credit, or hire purchase or consumer hire agreements to consumers will now fall within the regulatory remit of the Central Bank of Ireland.

As a consequence of this legislation, the Central Bank can apply the relevant provisions of its codes and regulations to all the regulated providers of credit, hire purchase and PCP agreements to consumers. In particular, the Central Bank will be able to apply Chapter 5 of its Consumer Protection Code on 'Knowing the Consumer and Suitability', and which requires that a regulated entity assess the suitability and affordability of credit before the provision of financial accommodation. This is in line with a recommendation that was made in the Tutty Report on the PCP market.

Firms which are providing these financial services will now be required to seek Central Bank authorisation as a retail credit firm or as a credit servicing firm as appropriate. Firms that have been providing these services up to now can, subject to making an application to the Central Bank for authorisation within a period of three months from the commencement of the Act, avail of transitional authorisation arrangements.

However, the Central Bank has indicated that it expects firms and their staff to meet the necessary minimum competency standards required of staff, with a particular emphasis on staff dealing with consumers in relation to retail financial products, at the earliest possible opportunity.

Overall this Act will ensure that consumers have the same level of protection no matter where they source their financial services.