The Central Bank (Supervision and Enforcement) Bill 2013 has been enacted following the signing by the President on the 11th July, 2013
The Act is an important step forward in building a strengthened regulatory framework for the Irish financial services sector.”
The key features of the Act include.
Customer redress for problems that are widespread or regular, such as overcharging or systems failures;
Debt management: a regulatory regime for debt management and debt advice;
Financial Services Ombudsman: provision for the naming of financial service providers that are the subject of complaints;
Whistleblower protections;
Central Bank regulation-making powers on a range of conduct of business areas, including consumer protection;
Enforcement: this includes restitution orders and the recoupment of investigation costs from those found guilty of an offence;
A doubling of the maximum administrative sanction to €1m for an individual and €10m for a firm;
Enhanced powers of inspection, investigation and information gathering for Central Bank authorised officers;
Auditor assurance: Central Bank power to require an auditor to provide a written report on compliance by a financial service provider with certain requirements;
A new system to allow banks from outside the EU to apply to set up a branch in Ireland.
In addition to the legislative changes under the Act, the Central Bank has introduced a range of reforms to the way it operates. These include: a significant increase in staffing and training levels, enhanced internal systems and the adoption of an assertive risk-based regulatory approach.
ENDS
15 July, 2013
Questions and Answers
What is the Act about?
The Central Bank (Supervision and Enforcement) Act 2013 enhances the power of the Central Bank to regulate, supervise and take action against financials service providers.
What is the Act not about?
The Act is not about mortgages, mortgage arrears or repossessions. These issues are generally dealt with under the Central Bank Code of Conduct on Mortgage Arrears and other property-related legislation.
Does this legislation affect banks?
Yes. Banks are included in the definition of regulated financial service provider and are subject to the Central Bank powers in the Act. The Act extends to some 14,000 regulated financial service providers in total, including insurance companies, intermediaries, investment firms, moneylenders and credit unions.
When does the Act take effect?
The next step is for the Minister to sign a commencement order which “turns on” the Act. We expect that this will take place shortly.
What if a bank gets into difficulty again?
The Central Bank and Credit Institutions (Resolution) Act 2011 is in place to provide the necessary mechanisms to allow the Central Bank to intervene where a bank gets into serious difficulty and is in danger of becoming destabilised or otherwise failing.
Does the Act affect my savings?
No.
The Deposit Guarantee Scheme (DGS) protects depositors in the event of a bank, building society or credit union authorised by the Central Bank of Ireland being unable to repay deposits.
Deposits up to €100,000 per person per institution are protected. The DGS is obliged to issue compensation to depositors duly verified as eligible within 20 working days of a credit institution failing.
The DGS is administered by the Central Bank of Ireland and is funded by the credit institutions covered by the scheme.