The Minister for Finance, Paschal Donohoe, TD, today (Tuesday) welcomed publication of the Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Bill 2021.
The Bill implements the key recommendation in the “Tutty Report” (which was commissioned by the Minister for Finance and published in November 2018) on PCPs (Personal Contract Plans) to extend the relevant provisions of the Central Bank’s Consumer Protection Code to all the providers of hire purchase/PCP agreements to consumers.
The Bill does this by requiring all such providers to become entities regulated by the Central Bank and this will give the Central Bank the power to apply the Consumer Protection Code, in particular the part that requires firms to assess the suitability of the product for the consumer and also the ability of the borrower to repay the debt over the duration of the credit agreement, to such firms.
In addition, the Bill will also require providers of indirect credit to consumers to become entities regulated by the Central Bank. Indirect credit is so called because the lender provides credit to the borrower by paying a retailer for the purchase of a good.
The Bill will also provide for the regulation of entities which service or own these agreements as well as making some consequential and related amendments to the Consumer Credit Act, including the extension of the existing interest rate cap on credit and hire purchase agreements provided to consumers (other than money lending agreements which have their own regulatory framework) to all entities that fall within the scope of that Act.
Welcoming Government approval for the Bill, Minister Donohoe said:
“This Bill will bring all providers of hire purchase and personal contract plans under the remit of the Central Bank and its Consumer Protection Code. This will significantly improve the level of protection available to the consumers of such agreements. The Bill will now proceed through the Oireachtas with the intention of being enacted later this year”.
Notes to Editors
Links to the Bill and the Explanatory Memorandum are pasted below: