Brendan Burgess
Founder
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Questions from Michael McGrath at the Oireachtas Finance Committee today.
Michael McGrath
Can I ask your views on interest rate issues.
1) Is it fair to discriminate between new and existng customers?
2) Cash back in the mortgage market. The CCPC made the point that these offers are exploitative and may negatively influence decisions. What is your view on prohibiting these offers.
Governor Lane
If the Oireachtas wants to add that law, off you go. But many markets do that. As long as you have a commercial banking system, the existing customers can switch to another lender. We have a switching consultation.
Michael McGrath: But we have customers who can't switch. It's unfair to them.
Lane: Those customers - the perception of unfairness is there. We advocate as much transparency as possible. We provide protection for people in arrears.
On cashback. There is a potential risk to some consumers. But others value "I accept I will pay more in the long run" . You have a trade-off. It would protect some people. But others make that calculation with their eyes open.
There is a global debate about paternalism.
Ed Sibley: Where an existing customer is in the same position, I think your position has some validity. There are differences with how banks market their stuff.
The precise circumstances which you describe- we haven't seen that. They can switch internally, even if they can't switch
On cash back, there is a long history of product provision and design where products are designed for a particular cohort and which then get overused. absolutely it's a valid product. Customers want to buy furniture. It's being used to protect the back book, and there is some risk associated with it. Whether it warrants a complete outright band. We are cognisant of it and we are looking at it.
Michael McGrath
Can I ask your views on interest rate issues.
1) Is it fair to discriminate between new and existng customers?
2) Cash back in the mortgage market. The CCPC made the point that these offers are exploitative and may negatively influence decisions. What is your view on prohibiting these offers.
Governor Lane
If the Oireachtas wants to add that law, off you go. But many markets do that. As long as you have a commercial banking system, the existing customers can switch to another lender. We have a switching consultation.
Michael McGrath: But we have customers who can't switch. It's unfair to them.
Lane: Those customers - the perception of unfairness is there. We advocate as much transparency as possible. We provide protection for people in arrears.
On cashback. There is a potential risk to some consumers. But others value "I accept I will pay more in the long run" . You have a trade-off. It would protect some people. But others make that calculation with their eyes open.
There is a global debate about paternalism.
Ed Sibley: Where an existing customer is in the same position, I think your position has some validity. There are differences with how banks market their stuff.
The precise circumstances which you describe- we haven't seen that. They can switch internally, even if they can't switch
On cash back, there is a long history of product provision and design where products are designed for a particular cohort and which then get overused. absolutely it's a valid product. Customers want to buy furniture. It's being used to protect the back book, and there is some risk associated with it. Whether it warrants a complete outright band. We are cognisant of it and we are looking at it.