The Central Bank confirmed last month that providers of hire purchase deals, personal contract plans (PCP) for car purchases and “buy now, pay later” (BNPL) finance have come under its regulatory purview on foot of new laws.

The Minister for Finance Paschal Donohoe has signed an order to commence the Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Act 2022.

The Act requires that providers of PCPs (Personal Contract Plans) become entities which are regulated by the Central Bank of Ireland. This will then give the Central Bank the power to apply the Consumer Protection Code, in particular the part that requires regulated firms to assess the suitability of the product for the consumer and also the ability of the borrower to repay the debt over the duration of the credit agreement, to such firms.

The new law implements the key conclusion of the Tutty report on PCPs, which was published in 2018 and recommended that the relevant provisions of the Consumer Protection Code should apply to all the providers of hire purchase/PCP agreements to consumers.

Mr Donohoe said: “The passing of this Act by the Oireachtas, and now its commencement, is an important development as it will permit the Central Bank to apply its Consumer Protection Code to the providers of a wider range of credit and hire purchase type agreements to consumers. This will significantly improve the level of protection available to the consumers of such agreements.”

The resulting Act also introduces an interest rate cap of 23 per cent annual percentage rate (APR) on all credit agreements provided to consumers, other than money-lending agreements which have a separate regulatory framework. It ensures that all retail credit firms must comply with a section of the Consumer Credit Act 1995 and notify the Central Bank if they wish to introduce any new charges or increase any charge that has been previously notified to the bank.

Gerry Cross, director of financial regulation in the areas of policy and risk said, “Our aim is to ensure that consumers have the same level of protection no matter where they source their financial services.”


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