Department of Finance: No changes in law to allow banks hike charges without Central Bank green light
THE law will not be changed to allow banks increase consumer charges without Central Bank permission, the Department of Finance has decided.
At the moment under the Consumer Credit Act banks have to apply to the regulators in the Central Bank if they want to imposed higher fees and charges on consumers for banking services.
AIB, Bank of Ireland and the Irish Banking Federation wanted this requirement changed.
But the Department of Finance published a review of the issue this morning and said this was not the right time to give banks freedom to set their own fees.
The Government had promised to review so-called Section 149 of the Consumer Credit Act after being asked to do so by the bail-out troika.
“The main conclusion of the review is that it would not be appropriate to repeal Section 149 at this point in time,” the department said.
“The lack of competition in the banking sector means that the removal of section 149 would give unfettered price setting power to the incumbent banks. However, this conclusion should be revisited when competition in the banking sector has improved.”