The Government published draft laws on Tuesday to bring hire purchase deals and personal contract plans (PCP) for car purchases under the watch of the Central Bank.
The so-called Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Bill 2021, if enacted, will require providers of hire purchase and PCP credit lines to become entities regulated by the Central Bank.
This will give the bank the power to apply the Consumer Protection Code, in particular the part that requires 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 Department of Finance said.
The Bill implements the key recommendation of a Government-commissioned report that was published in 2018.
In addition, the Bill will also require providers of indirect credit to consumers to become entities regulated by the Central Bank. Indirect credit is so called because the lender provides credit to the borrower by paying a retailer for the purchase of a good.
"This will significantly improve the level of protection available to the consumers of such agreements. The Bill will now proceed through the Oireachtas with the intention of being enacted later this year," the Minister said.
