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Government knew bank levy could be passed onto consumers - Doherty

11 February, 2014 - by Pearse Doherty TD


Sinn Féin Finance Spokesperson has released figures obtained from the Minister of Finance showing that the Central Bank has approved 8 increases in charges or new charges since the introduction of a levy on banks in last October’s’ budget.

Deputy Doherty has also released an extract of a Freedom of Information request on the case which shows that while officials considered amending the levy to prevent covered institutions passing on the levy this did not form part of the final legislation.

Deputy Doherty said:

“I am disappointed but not surprised that the banks seem to have simply passed on the bank levy to customers. This levy was justified on the basis that the banks should be contributing more to economic recovery.

“It seems the banks disagree and once more the government has failed to stand up to them.

“I have also obtained, through a Freedom of Information request, evidence that the option of inserting into the legislation a ban on any covered intuition passing on this charge to customers was considered but not implemented.

“The Central Bank can refuse an application from a bank for some increases or new charge. Since the Budget in October of last year which brought in this levy it has approved 7 full applications and partially approved one application for hikes in charges. The Minister has once again simply let the banks off the hook as he has done with bankers’ salaries and the use of legal letters to meet their requirements under the mortgage targets.

“The National Consumer Agency only this week released new research showing that 34% of current account holders have had their “free” banking withdrawn in the past 12 months. In less than five months the Central Bank has waved through 8 different increases and there are any other increases that do not require the Central Bank’s approval.”

DÁIL QUESTION addressed to the Minister for Finance (Deputy Michael Noonan)
by Deputy Pearse Doherty

To ask the Minister for Finance the number of applications that have been granted by the Central Bank under Section 149 of the Consumer Credit Act for the provision of a new service or an increase in existing customer charges by each bank operating here since 1 October 2103; and if he will detail each application granted.

REPLY.


Section 149 of the Consumer Credit Act 1995 (as amended) came into effect in May 1996 and requires that credit institutions and bureaux de change notify the Central Bank if they wish to:

· introduce any new customer 'charge' for providing a service or
· increase any existing customer 'charge' for providing a service.

The following table, provided by the Central Bank, shows the notifications processed by the Central Bank under Section 149 of the Act between 1 October 2013 and 31 January 2014.
(See attached file: Extract FOI 205 2013.jpg)

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