Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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445. To ask the Minister for Finance if the Central Bank of Ireland has engaged with the Financial Conduct Authority in the United Kingdom regarding a banking group's (details supplied) potential exposure of approximately €400 million arising from the UK motor-finance redress scheme; if his Department has been briefed on the projected impact on the Group's capital adequacy and profitability; and if he will make a statement on the matter. [57920/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy may be aware, in September 2022 the State completed the sale of its remaining shareholdings in Bank of Ireland, returning it to full private ownership. Therefore, as Minister for Finance, I have no role in operational decision made by this bank. This includes details in relation to the Bank’s profitability or its capital, these are matters for the board and management of the Bank.

In relation to the engagement between the Central Bank of Ireland and the Financial Conduct Authority. The Central Bank has informed me that it has engaged with the Financial Conduct Authority and other relevant authorities as well as with the firm itself in relation to this matter. The Central Bank notes the public statement made by Bank of Ireland Group plc that it has signalled a potential need to increase the provision it holds against this exposure from the £143m booked at H1 to £350m at FY 2025. The Central Bank also notes that Bank of Ireland Group plc has indicated that this remains under analysis and adjustments can be made once there is clarity on the potential impact.

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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446. To ask the Minister for Finance if his Department has assessed the implications for the Exchequer of a banking group's (details supplied) reported provision of up to €400 million in respect of the UK motor-finance redress scheme, particularly regarding potential effects on corporation-tax receipts and any dividend payments to the State as a shareholder; and if he will make a statement on the matter. [57921/25]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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450. To ask the Minister for Finance if his Department is monitoring the fiscal impact of major banking-sector provisions, including banking groups (details supplied) estimated €400 million exposure to the UK motor-finance redress scheme, on overall budgetary forecasts and the medium-term fiscal framework; and if he will make a statement on the matter. [57925/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 446 and 450 together.

I am informed by the Central Bank of Ireland that it has ongoing engagement with Bank of Ireland Group in respect of the financial impact of the firm’s exposure to the UK motor finance redress scheme.

Bank of Ireland has recently indicated that it may increase its provision from the £143m booked in H12025 to £350m, the provision will be updated as part of Bank of Ireland Group’s FY25 financial reporting process. Bank of Ireland has indicated that this figure remains under review.

The UK’s Financial Conduct Authority (FCA) consultation regarding the proposed compensation scheme is ongoing. The final cost for Bank of Ireland could change depending on the outcome of the FCA consultation, actual customer opt-in rates and any further legal, regulatory or industry developments.

It should be noted that the State is no longer a shareholder in Bank of Ireland, having exited its shareholding in September 2022.

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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447. To ask the Minister for Finance the mechanisms in place for cooperation between the Central Bank of Ireland and the UK Financial Conduct Authority in circumstances where Irish-regulated banks are subject to enforcement or redress proceedings in the United Kingdom; and if he is satisfied that sufficient information-sharing exists to safeguard Irish financial-system stability. [57922/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Central Bank of Ireland has informed me that it has engaged with the Financial Conduct Authority (FCA) and other relevant authorities in relation to this matter.

The Central Bank’s open and engaged charter puts a priority on engaging with our stakeholders, of which peer competent authorities are key in this regard.

The Central Bank has a strong working relationship with international peer regulators, such as the FCA, including where appropriate in matters of enforcement.

The Central Bank and the FCA entered into a Memorandum of Understanding (MoU) in April 2019 in relation to supervisory cooperation. Article 18 of the MoU relates to cooperation and information exchange in relation to enforcement. Any such cooperation and information sharing must operate within the regulators’ respective statutory frameworks. The MoU is publicly available on the FCA’s website at the following link: www.fca.org.uk/publication/mou/mou-central-bank-ireland-boe-fca.pdf.

The Central Bank Reform Act 2010 provides the Central Bank with the power to provide assistance to third country authorities. Under Section 54(2), the Central Bank may, at the request of a third country authority, require information on a matter about which the Central Bank has required or could require information or the production of documents under any provision of financial services legislation.

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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448. To ask the Minister for Finance if the Central Bank of Ireland has undertaken a review of commission-linked car-finance arrangements in the domestic Irish market similar to those under investigation by the UK Financial Conduct Authority; if so, the findings which have emerged; and if he will make a statement on the matter. [57923/25]

Pearse Doherty (Donegal, Sinn Fein)
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496. To ask the Minister for Finance the number of firms engaged in Discretionary Commission Arrangements in the provision of motor finance through hire-purchase agreements prior to the Central Bank's intervention in 2024; the estimated number of customers effected; and if he will make a statement on the matter. [58949/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 448 and 496 together.

The Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Act 2022 brought the provision of hire purchase (including personal contract plans) within the authorisation remit of the Central Bank of Ireland.

The Central Bank of Ireland regulates firms which distribute credit products through credit intermediaries. Credit intermediaries (including car dealers who hold such an authorisation) are regulated by Competition and Consumer Protection Commission.

In June 2024 the Central Bank of Ireland wrote to regulated firms providing hire purchase motor finance instructing them to cease the practice of using discretionary commission arrangements in relation to finance arranged through credit intermediaries by end-July 2024.

The Central Bank of Ireland took this action following a review. At the time of the review, it is understood that eight firms were using discretionary commission arrangements for motor finance with circa 135,000 customers.

The Central Bank of Ireland concluded that the incentive these arrangements created was not consistent with market outcomes that the Consumer Protection Code seeks to achieve.

Any consumer who is not satisfied with how a regulated firm is dealing with them in the course of providing a service should make a complaint directly to the regulated firm in the first instance. If a customer is not satisfied with how their complaint is dealt with, they have the option of making a complaint to the Financial Services and Pensions Ombudsman.

It should be noted that commission arrangements for motor finance in the UK were the subject of customer claims with the Financial Ombudsman and the courts. The regulatory requirements for credit intermediation in Ireland and the UK are different and decisions by the Financial Ombudsman and the courts in the UK are not applicable to Ireland.

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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449. To ask the Minister for Finance if he will request, under Section 33AK of the Central Bank Act 1942, a report from the Central Bank of Ireland on Irish banks' exposure to overseas redress or compensation schemes; and if he will consider publishing a summary of the report to promote transparency and maintain market confidence. [57924/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Section 33AK of the Central Bank Act 1942, as amended, deals with the circumstances under which the Central Bank can disclose confidential information to third parties. It does not grant the Minister for Finance the power to request a report from the Central Bank.

The Central Bank of Ireland has provided me with the following information.

Since 2014, the Single Supervisory Mechanism (SSM) is the system of banking supervision in Ireland and the rest of the euro area. The European Central Bank (ECB) has overall responsibility for the effective and consistent functioning of the SSM, with a view to carrying out intrusive and effective banking supervision, contributing to the safety and soundness of the banking system and the stability of the financial system. The ECB has direct supervisory responsibility for the euro areas ‘significant institutions’ while the national competent authorities, including the Central Bank of Ireland has direct competence for institutions categorised as less significant.

Banks in Europe, including the Irish banks, are subject to disclosure requirements to promote transparency, market discipline and market confidence. This includes exposure to material risks in all jurisdictions they operate in. Regulatory requirements mandate them to adequately provision for such risks. Furthermore, they must disclose key information on provisions in annual accounts and financial statements.