THE GOVERNMENT HAS said that it will not oppose a Fianna Fáil proposed bill that would regulate firms offering debt management advice and household budgeting services.
In the Dáil last night, the Minister for Small Business John Perry said that the government would not oppose the proposal to compel operators in the debt advice industry to declare their fees upfront and for the Central Bank to produce a code of practice within six months of the legislation being enacted.
The bill was introduced in the Dáil by the Fianna Fáil spokesperson for public expenditure and reform, Seán Fleming, on behalf of the party’s finance spokesperson Micheal McGrath last night.
“Fianna Fáil is bringing this legislation before the Dáil this week to put the spotlight on a sector which has mushroomed in recent times and that remains unregulated,” McGrath said yesterday.
“The lack of regulation has resulted in consumers’ money being put at unnecessary risk. Vulnerable consumers are being taken advantage of by some unscrupulous, cowboy operators in this area.”
McGrath claimed that up-front fees of as much as €750 were common for debt advisors with ongoing monthly fees of 15 per cent of the customers payment going to advisory firms in some instances.
The bill proposes that a debt management advisor would be regulated by the Central Bank and be required to have authorisation as well as having have to set out all fees from the point of engagement and inform potential clients of services offered by the Money Advice and Budgeting Service (MABS).
The bill will go to a vote tonight at 9pm in the Dáil following further debate in which McGrath will speak.
If, as expected, it passes second stage, this will be the third piece of Fianna Fáil legislation in the financial area that the government has allowed to pass.
Last year, the government allowed a bill which provided for the establishment of Debt Settlement Office to advance unopposed and in March, a bill which gives more power to the Financial Ombudsman to name institutions it makes adverse findings against passed second stage.