Written answers

Wednesday, 10 April 2024

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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21. To ask the Minister for Finance the measures he is putting in place so that future banking changes are managed in a controlled, fair and transparent manner for consumers; and if he will make a statement on the matter. [14273/24]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Throughout recent changes to the banking sector, including the departure of two banks from the Irish market, the existing robust financial consumer protection framework has supported consumers of financial services in Ireland.

Notwithstanding the strong consumer protection framework in Ireland, the retail banking sector is subject to ongoing change. While some of this is driven by statutory and regulatory changes, many changes that affect consumers are driven by the industry itself as it introduces new products and services or withdraws older product and services. Industry can also change its service offering including in terms of bank branches and ATMs.

Where changes are introduced because of statutory or regulatory reforms, often through EU Directives and Regulations, it is a priority for me and my Department to put the consumer at the centre of our considerations during the negotiations.

We also make changes through domestic legislation that are expressly for the purpose of protecting the needs of consumers. In that regard, my Department is currently drafting the Access to Cash Bill to provide continued sufficient and effective access to cash and to ensure that the future of evolution of cash infrastructure is managed under a statutory framework in a fair and transparent manner for consumers.

I would like to thank the Joint Oireachtas Committee on Finance, Public Expenditure and Reform and Taoiseach for its quick production of its Pre-Legislative Scrutiny Report, which I will take into account in the drafting of the Bill.

The Deputy will be aware that the Access to Cash Bill arose following a recommendation in the Retail Banking Review. The Government approved and published the comprehensive Retail Banking Review in November 2022 and the implementation of its 34 recommendations, including on Access to Cash, are now Government policy.

As noted above, many changes in the banking sector flow from industry driven initiatives and changes. While decisions relating to the business model of regulated firms are commercial matters for the boards of those firms, the Central Bank notes that it expects firms to take a consumer-focused approach in respect of any decision that affects their customers. It is the responsibility of the individual banks to ensure that they are putting their customer first, ensuring fair treatment of customers and that customers understand what the changes mean for them.

In terms of consumer protections and future changes, the Central Bank is also currently undertaking a major review of its Consumer Protection Code (the Code). The aim of the Code review is to ensure an updated and modernised Code is in place which is centred around firms securing customers’ interests and delivering positive consumer outcomes. A public consultation process on the revised Code proposals will be open until 7 June 2024. Enhancements being proposed by the Central Bank in the revised Code include:

  • increasing the minimum notice period for banks to six months where they intend to close, merge or move a branch and to four months where they intend to significantly change services in a branch;
  • requiring banks to publish board-approved assessments of the impact of the changes on customers; and
  • requiring banks to conduct an ex-post assessment to include a survey of impacted customers nine months after the change, which must be completed before 15 months has elapsed since the change.
Finally, the Central Bank (Individual Accountability Framework) Act 2023 was signed into law on 9 March 2023. The Act is designed to introduce greater personal accountability for persons in senior roles in financial services firms, to introduce conduct standards for all those performing controlled functions in the financial services sector and to contribute to the transformation of culture in the sector.

The Act significantly enhances the powers of the Central Bank to ensure that regulated financial service providers and those working for them act in the best interests of consumers and builds on the powers granted to the Central Bank under the Central Bank Reform Act 2010 and the Central Bank (Supervision and Enforcement) Act 2013.

The Individual Accountability Framework will drive positive changes in terms of wider banking culture, and enhanced accountability while simplifying the taking of sanctions against individuals who fail in their financial sector roles. It gives the Central Bank the regulatory tools necessary to ensure that consumers dealing with financial service providers in Ireland can be confident that their best interests will be protected.

The Act ultimately seeks to improve the culture of the financial sector and boost public trust in it.

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail)
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22. To ask the Minister for Finance the status of the National Payments Strategy; and if he will make a statement on the matter. [14271/24]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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You will be aware that the Retail Banking Review, published in November 2022, made two clear recommendations regarding payments: (1) for my Department to develop Access to Cash legislation and prepare a related Heads of a Bill in 2023; and (2) for my Department to lead on the development of a National Payments Strategy (NPS) in 2024.

I published the terms of reference for the National Payments Strategy (NPS) in June 2023, and work on the NPS has commenced, taking account of the changing payment landscape and ongoing legislative developments at EU level, including proposals on instant payments, payment services, legal tender and the digital euro.

My Department sought views from across Irish society though a public consultation. A consultation paper on the National Payments Strategy was prepared to guide the discussion and is available on the Department’s website. This consultation was open for nine weeks and closed on 14 February 2024. The responses to the public consultation will form an important part of the National Payments Strategy to be published in 2024.

The consultation paper had three main areas of focus:

  • Payments roadmap
  • Acceptance of cash
  • Access to cash [the development of the access to cash legislation is a separate work stream]
The payments roadmap describes the payments landscape in Ireland and covers a number of topical issues, including instant payments, open banking and fraud. The section on access to cash complements the domestic legislation which is currently in train. Specifically, the access to cash section examines current cash usage in Ireland and then looks at potential future changes to the access to cash criteria to be decided in domestic legislation. The section on acceptance of cash considers cash as a form of payment, and a government policy on acceptance or facilitation of cash by public bodies as well as key sectors

In parallel with the consultation paper being open, a team within my Department engaged with a wide variety of stakeholders from across industry and civil society. This included, representative bodies for vulnerable groups, actors in the banking and payments ecosystem as well as regulatory bodies.

A review of all submissions received as part of the consultation process is underway and I plan to publish a high-level summary shortly. Engagement with stakeholders will continue until the Strategy is finalised, by end 2024.

Photo of Seán HaugheySeán Haughey (Dublin Bay North, Fianna Fail)
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23. To ask the Minister for Finance his plans to extend the powers of the Central Bank in relation to the regulation of ATMs; and if he will make a statement on the matter. [14267/24]

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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39. To ask the Minister for Finance how he proposes to protect the role of cash in our society and economy in the future; and if he will make a statement on the matter. [14269/24]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 23 and 39 together.

The Department of Finance's Retail Banking Review, published in November 2022, concluded that cash, despite a decline in its usage, remains an important element of the payments system and the broader economy and it is essential that cash remains readily available to customers through ATMs and other means across the country.

The Review recommended that the Department of Finance should develop Access to Cash legislation and prepare heads of a bill with the initial objective of developing criteria that would secure access to cash at about the levels prevailing in December 2022. It would also provide for such criteria to be amended appropriately in future as and when cash usage declines further.

Arising from this recommendation, on the 23rd of January, I published the General Scheme of the Access to Cash Bill 2024, which will establish a framework to provide that any future evolution of the cash infrastructure will be managed in a fair, orderly, transparent, and equitable manner.

The legislation will allow me to prescribe regional requirements for the minimum numbers of ATMs per 100,000 people, the proportion of the population that must be no more than 10 km from an ATM, and the proportion of the population that must be no more than 10 km from a “cash service point”.

The Bill will require entities, whose share of current accounts and household deposits exceed percentages I will prescribe, to be responsible for maintaining access to cash levels. The designated entities, as they will be known, will, initially, be the three main retail banks.

The Bill also provides for the remedying of “local deficiencies.” These are locations within a Nomenclature of Territorial Units for Statistics (NUTS3) region where particular difficulties arise in accessing cash. The Central Bank will assess such cases and, where warranted, may require designated entities to address the issue. The Central Bank will prepare and publish guidance on local deficiencies prior to implementation of this provision.

The Retail Banking Review also called on Department officials to require ATM operators to be authorised and supervised by the Central Bank, and to provide the Central Bank with responsibility and powers to protect the resilience of the cash system - including the authorisation and supervision of cash-in-transit firms in respect of their cash handling activities and related financial services.

Although ATM deployers are required to comply with various security requirements set by the Private Security Authority, the operation of ATMs is not currently regulated by the Central Bank. As a result, there are no codes or regulations governing service standards, including hours of operation, denomination stocking, outages and maximum repair times. Reporting is voluntary.

There is also no requirement to give notice of decisions to close or install ATMs or indeed of a decision to exit the business or enter it. The Access to Cash Bill will address these matters.

The Drafting of the Access to Cash Bill is a priority, and it is being progressed as such. I would like to highlight my appreciation for the input of the Joint Committee on Finance, Public Expenditure and Reform and Taoiseach, who recently and promptly published their pre-legislative scrutiny report on the Access to Cash Bill.

The report of the Committee is welcomed, and the recommendations therein will be considered as the drafting of the Bill continues.


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