Consumer Advisory Group
The role of the Consumer Advisory Group ('CAG') is to advise the Central Bank on the performance of it's functions and the exercise of its powers in relation to consumers of financial services including:
The main functions of the Consumer Advisory Group are:
- the effects of the Central Bank's Strategic Plans on consumers of financial services;
- initiatives aimed at further enhancing the protection of consumers of financial services; and
- if the Central Bank so requests, documents, consultation papers or other materials prepared by the Central Bank
The members of the Consumer Advisory Group are:
Elaine Kempson is currently an independent consultant based in the UK. She is a Professor Emeritus at the University of Bristol where she was formerly Director of Personal Finance Research Centre. She has almost 30 years of experience in research in consumer behaviour and has worked on a number of studies for regulatory and international bodies, including World Bank, OECD and the UK Financial Services Authority. She is also a non-executive director of the UK Financial Ombudsman Service.
Anthony Walsh was Chief Executive of the Institute of Bankers in Ireland. Previously he spent nearly 20 years at Dublin City University (DCU), where he was Professor of Accounting and Dean of the Business School. He is a member of the Qualified Financial Advisor Board and a Director of the Irish Universities’ Quality Board.
Niamh Moloney is a Professor of Financial Markets Law in the London School of Economics and Political Science, she has also served as a member of the UK Financial Conduct Authority’s advisory Financial Services Consumer Panel and has acted as an Expert Witness to UK Parliament Select Committee Inquiries on financial market matters.
JB McCarthy is the Development Director of the Financial Services Innovation Centre in University College Cork which provides research, development and innovation (RDI) capabilities to domestic and international companies. JB has participated in research on international financial services innovations and development of financial services IT projects.
John Mark McCafferty
John Mark is the Head of Social Justice and Policy in the St. Vincent de Paul, where he leads on all Policy and Advocacy work. He manages key external relationships with Government , Regulators, Companies and the wider Voluntary sector. He also represents St. Vincent de Paul during the Social Partnership Programmes
Summary of the meetings to date
Ger Deering, Financial Services Ombudsman, provided members with an overview of his office’s Dispute Resolution Model. Work is progressing on the next phase of a project in relation to commission payments to intermediaries. Next steps will include, inter alia, incorporating feedback arising from the Discussion Paper into a draft Consultation Paper, and developing proposals to further strengthen protections for consumers. The Group was provided with an overview of the latest Mortgage Switching Research results. Members were presented with the Consumer Protection Outlook Report (CPOR) 2017. The CPOR outlines the Directorate’s consumer protection objectives, an assessment of the current and emerging consumer environment and risks to Consumer Protection objectives, for full consideration by regulated firms. Members were provided with an overview of the Moneylending sector, its’ regulatory framework, consumer research and areas of concern within the sector. Consumer Protection propose to commence a review of the Moneylenders Code in Q4 2017. Additional operational updates provided to the Group included: the protection of consumers in a digitalised financial services environment and whether or not enhancements are necessary to reflect this new environment; the Tracker Mortgage Examination Review; and an update on the conferences the Central Bank will facilitate in April.
This meeting marked the end of tenures for both the Chair, Anthony Walsh and member, Elaine Kempson. Their valued contributions and commitment to the Group was acknowledged by both the Governor and the Director of Consumer Protection.The management team provided the group with a brief overview of their relevant sectors and members' views were sought on the emerging consumer protection environmental and sectoral risk assessments as well as priorities for the 2017 work programme, including a possible assessment of the Consumer Protection rules framework in the medium term. A discussion took place around Fintech and how it is affecting the work of the Directorate, and members were asked to inform our thinking in this area. The Central Bank's Communication unit provided an overview on the status of the Central Bank's project to re-develop the Central Bank's website, including the development of a new section with information specifically aimed at the public. The new website is due to launch in Q1 2017.
The meeting began with initial discussions on motor insurance pricing, structured products, mortgage arrears and the tracker mortgage examination. Members were updated on Consumer Protection's annual risk assessment process and how it will help determine the Directorate's objectives for 2017. The Group was presented with the findings of both the thematic inspection on Health Insurance renewals, as well as Structured Retail Products. Members were provided with an overview of the main changes introduced in the Payment Services Directive and also an update on the Department of Finance consultation on National Discretions under MiFID II and IDD relating to inducements to intermediaries. The Group was advised on the progression of the Tracker Mortgage Examination review and were updated on the Mortgage Switching research being undertaken by the Directorate.
Jill Forde, Head of Communications, provided members with an overview of the Central Bank’s emerging communications strategy and new website developments. The Group was advised that the Directorate is considering carrying out consumer focused research in order to gain a better understanding of consumer experiences, behaviours, perceptions and attitudes towards mortgage switching. The output of this research will help inform CPD’s consideration of any future work that may be required in the area of mortgage switching. Cyril Roux, Deputy Governor joined the meeting to outline and discuss the Central Bank’s strategic direction and plan, including its objectives and key priorities over the next few years. Members were also provided with an overview of the current position on mortgage arrears with a particular emphasis on Long Term and Non-Performing Loans. Other areas of discussion focused on the Payments Account Directive in terms of its transposition, the Minimum Competency Code as well as future CPD projects and inspections.
Following a general discussion on topical issues, an overview of the Retail Intermediary sector was presented to members which generated a discussion on key consumer risks. The proposal to respond to the EU Green paper on Financial Services was discussed as well as the risks and benefits arising from current commission arrangements in place between product producers and intermediaries across the insurance, banking and investment sectors. The Group was presented with CPD's approach to influencing a consumer focused culture in the provision of financial services as a key strategic priority over the next three years. Members were also given an overview of how market intelligence, including data on consumer complaints, is used to support a risk and evidence-based approach to our work.
Following a presentation on the outputs from internal consumer risk assessments, the focus of this meeting was in seeking input from members on strategic priorities for the Consumer Protection Directorate for 2016 and beyond in order to inform our annual work planning and the preparation of the 2016 Consumer Protection Outlook Report.
Views of the Group were sought in relation to the on-going review of the Code of Conduct for Business Lending to Small and Medium Enterprises, particularly the responses received to the public consultation on this project. Members were updated on the proposed public consultation on enhanced transparency measures for consumers with variable rate mortgages and on progress in work related to the transposition of the EU Payments Account Directive, particularly on Member State discretions. A general discussion took place on work underway in the area of health insurance.
Following a general discussion on topical issues, an overview of the Life and Non-Life insurance markets from both a prudential and conduct of business perspective was presented to members which generated a discussion on key risks and issues. The implementation of the European Supervisory Authority product oversight and governance guidelines and technical standards was discussed, focusing on some of the key principles. An update on the research into Hire Purchase and Personal Contract Plans was presented at the meeting. The findings from the recent review of Debt Management firms compliance to date with Central Bank requirements was delivered and next steps for this industry sector were outlined.
The Registrar of Credit Unions delivered a presentation outlining the Irish Credit Union sector and its key priorities and challenges including regulatory developments which their division are currently focusing on. Members also received a copy of the Netherlands Authority for Financial Markets report on the outcome of the peer review of the Consumer Protection function of the Central Bank of Ireland. A discussion took place on how the Bank is approaching the regulation of a changing payments sector including innovation and emerging changes in payments products, services and providers.
An overview of the Consumer Protection Outlook Report – which outlined the range of consumer protection issues and risks which the Directorate will focus on during 2015, was presented. As part of the ongoing discussions around the 5 ‘C’s framework within which the Directorate operates, a discussion took place on Compliance and how the Directorate utilises industry Board meetings, speaking engagements, seminars and Roadshows to promote compliance in industry. Members were asked to comment two EU consultation papers on product oversight and governance, to assist the Central Bank’s input into the drafting of guidelines. A brief update on the transposition of the Mortgage Credit Directive and the consultation paper on Macroprudential measures were also discussed.
A verbal update was given to members of topical issues currently under review by the Consumer Protection Directorate (CPD). Following this, a presentation was delivered on the proposed development of a Consumer Protection model that supports prudential supervision and conduct of business. An update on the 2014 peer review of the Consumer Directorate by the Netherlands Authority for Financial Markets was provided to the group. The Directorate has commenced the annual sectoral risk assesment process for 2015, and members were invited to submit their views on areas of concern, which could be considered for work plans for the following year.
A verbal update was given to members of topical issues currently under review by the Consumer Directorate. Members then discussed how the Consumer Directorate promotes a challenging and outcome focused approach to its work, the work of those we regulate, and the Irish market place.
A discussion took place on Virtual Currencies and whether they should be regulated, including an update on developments in relation to this in the European context. Members also discussed the issue of Crowdfunding and peer-to-peer lending both in an Irish and International environment. The Bank proposes to issue a warning notice to consumers and industry in June 2014 on this topic.
The team involved in the development of a central credit register discussed the progress towards implementaton of the register which will have data available from several key financial sectors. The register is intended to promote responsible lending and help drive better lending decisions.#
An update was given to members on the proposed Debt Management code including the proposal to issue a second consultation document in June.
A verbal update was given to members of topical issues the Consumer Directorate have been dealing with in recent months, including the restructuring of the banking system and sale of loans to unregulated entities. A discussion took place on how regulators, industry and consumers need to come together to try and rebuild and maintain consumer confidence in the financial services industry.
The Registrar of Credit Unions gave a presentation on the sector in Ireland outlining the context and challenges including the establishment of a Commission on Credit Unions. Following this a discussion took place on the Health Insurance sector, around the proliferation of products and the impact of increased premiums on consumers.
Members were informed of new powers available to the Central Bank to establish a customer redress scheme for problems which are widespread or regular in the financial services sector, these include the Bank having the power to direct a regulated financial service provider to make appropriate redress to customers.
The Consumer Directorate presented on the outcome of the Sectoral Risk assessment process which was undertaken to identify key priorities and strategic goals to be included in the 2014 work programme and members gave their feedback. A presentation by the National Consumer Agency on their role and functions, particularly in relation to the provision of information to consumers was held as this is a key concern of the group. This item will be elaborated upon in future meetings.
The members of the Consumer Advisory Group (CAG) were asked to consider what the strategic priorities of the Consumer Directorate should be for the year ahead. Each of the Directorate’s teams presented to the group on the challenges and risks identified for their sectors and the culmination of this work will assist in identifying high level priorities and activities for 2014.
A mid-project update on the Payment Protection Insurance Review was provided to the members, details of which have been published on the Central Bank website. This review is scheduled for completion by the end of 2013.
Finally, members received an update on the revised Code of Conduct on Mortgage Arrears and associated media, public and parliamentary queries received. The group was also briefed on the supervisory programme to monitor the implementation of the revised CCMA by mortgage lenders to ensure full implementation by 31 December 2013.
A project update on the “Sales Incentives in the Banking, Insurance, Investment and Stockbroking Companies” themed inspection was delivered to the Group. A representative from Banking Supervision informed the Consumer Advisory Group of the Mortgage Arrears Resolution Targets and the Central Bank’s framework for a pilot approach to the co-ordinated resolution of multiple debts owed by a distressed borrower. Following the closure of the consultation process on the review of the CCMA the Consumer Advisory Group was advised on the main areas of concern identified, and given an outline of next steps in the process.
Rules of the Consumer Protection Code for industry was discussed.
An independent review of activities of the Consumer Advisory Group was held and the final report delivered to the Director of Consumer Protection.
An outline of the proposed consumer protection themed reviews and inspections scheduled for 2013 was presented to the group, including information on the outcome of recent CCMA Themed inspection, around the compliance of some non-banks to the contacts and appeals requirements of the CCMA. The review of the CCMA and draft consultation paper which set out a number of strategic issues arising from the pre-consultation with stakeholders was discussed.
Market Intelligence and Research projects scheduled for 2013 were outlined for the group.
Presentations were made to the Consumer Advisory Group on how the Consumer Directorate was developing the Risk Outlooks for the various industry sectors from a consumer protection perspective. Each of the Industry Sectors which the Directorate regulates from a conduct of business viewpoint was considered and the key areas in each sector which the Directorate will focus on and priorities and themes for consumer protection work in 2013 were presented for discussion.
A discussion also took place around the pending Review of the Code of Conduct on Mortgage Arrears (CCMA).
The members of the Consumer Advisory Group were given an update on a technical issue which arose in the banking sector and the establishment of the Central Bank incident group to respond to the problem. A discussion took place on Client Asset Requirements, focusing on the review currently taking place and the Bank’s participation in the Joint Industry Working Group. A brief presentation was given on the proposed introduction of Personal Insolvency Legislation to assess the group’s views to regulation of Personal Insolvency Practitioners. The remainder of the meeting focussed on consideration of the Central Bank of Ireland draft strategy for 2013-2015.
During the February meeting of the Consumer Advisory Group, updates on the issue of Basic Bank Accounts and the Review of Debt Management Companies were given to Members. The Consumer Protection Directorate gave a presentation on the Mortgage Arrears Resolution Scheme. Papers were presented on the roll-out to industry bodies of the 2012 Consumer Protection Code and the issue of how industry should deal with unsolicited contacts with consumers. A short discussion took place on the proposed commissioning of research into remuneration structures to inform opinion of how this area should be regulated. The members were also invited to give their opinions on the factors that influence consumers to switch current accounts. Finally the members received a presentation of the EU Regulatory Framework under which the Central Bank operates.
Topics discussed were the Mortgage Arrears Resolution Strategy, Bankruptcy Legislation and Resolution and the Roll-out Process and Implementation Programme for the Consumer Protection Code.
Participants joined in a workshop to develop the Consumer Protection Directorate Strategy for 2012 - 2014.
Topics discussed were on the Review of the Consumer Protection Code, Review of the SME Code, Mortgage Arrears, Market Intelligence and the long term strategy for the Consumer Protection Directorate.
Topics discussed were the Review of the Consumer Protection Code, Review of the Operation of Section 149 of the Consumer Credit Act, Tracker Mortgages and restrictions on the operation of bank accounts.
Topics discussed were the Review of the Consumer Protection Code and the Review of the Operation of Section 149 of the Consumer Credit Act.
Financial Services Consultative Panels
The Central Bank Reform Act 2010 replaced the Financial Services Consultative Consumer Panel and the Financial Services Consultative Industry Panel with the new advisory arrangements set out above.