DAIL DEBATE

ICC Bank Bill 1999

Take Number: EE

Next Take Number: FF

Forum

DÁIL ÉIREANN

Sitting Time

Sitting Date

18:30

23 November 1999

Text:

Mr. Kelleher: I thank Deputy Fleming for sharing his time with me and I welcome this opportunity to discuss the broad thrust of the Bill. This is a Bill to facilitate the sale of ICC Bank. In view of the fact that there is now only one bidder, I am concerned that the Government may not receive a fair price for ICC Bank. I hope the Government has already decided on a minimum price and that the sale will be called off if this is not achieved. Time could then be allowed for other bidders to tender for the purchase of ICC Bank. The bank has been on the market for quite a while and since the early 1990s has been spoken of as a bank which could be sold.

One could argue that there is no need for State involvement in banking at this point in Irish economic life. The Industrial Credit Corporation is a very small player in Irish banking but in its early years ICC Bank played a very important part in developing the ethos of business in Irish society. I hope whoever purchases the bank will allow that ethos to develop and flourish. One could argue that the bank which purchases ICC Bank will have that business ethos. However, if it is bought by a large bank, ICC Bank could be absorbed completely and the driving force which made it a success could be diluted. I am concerned about that possibility.

I am concerned about the customer. A customer with a business plan involving a long-term loan with ICC Bank who suffered a slight hiccup in regard to repayments could renegotiate with ICC Bank if it were on its own. However, there could be difficulties for such customers if ICC Bank were taken over by another institution which did not have the same mentality in regard to lending to small and medium sized businesses. While I hope that will not arise given our healthy economy and low interest rates, it could have a bearing if there were a downturn in the economy or, more importantly, an increase in interest rates.

I am a little concerned about the sale. I hope the Government and the Minister's advisers and officials have a bottom line and that if the bid is short of that, a plan will immediately be drawn up to allow ICC Bank to continue and to provide any investment necessary for it to grow and flourish. I understand a further State injection would possibly be needed to allow that happen.

I am also concerned about interest rates. Far too often we have heard of individual cases of overcharging by banks in regard to interest rates. We need to appoint an ombudsman on a statutory basis who would have the full authority and legislative power to, at the behest of any bank customer, investigate their documentation and arbitrate on whether they were overcharged. I have heard of numerous occasions of overcharging by banks, whether intentionally or unintentionally. My main concern is not mortgage loans because people are very conscious of mortgage interest rates, which are very high profile. However, there is potential for the banks not to pass on interest rate reductions on smaller loans such as credit cards, motor loans and home insurance loans. The banks have been very slow in the past to reduce interest rates on those type of loans because the market for them is not as high profile or cut and thrust as that for mortgages. We must take a serious look at the whole banking system because of the evidence that is emerging about overcharging.

Deputy Fleming referred to the fact that banks are avoiding tax. If people in the banking sector are avoiding tax, it may also be suggested that they are continuing to overcharge their customers. Not every customer has the ability or expertise to find out how much they should be charged on a loan, particularly the smaller loans which do not relate to house purchases.

Publicans need a tax clearance certificate to renew their licences. I am of the firm opinion that anyone purchasing ICC Bank or any other State asset should have to produce a guarantee from the Revenue Commissioners that they are fully up-to-date in the payment of their taxes. We were too soft on these institutions in the past and it is time for us to state firmly that tax avoidance is not acceptable at any level, whether by small farmers or large banks.