(16)Where an appeal is made under subsection (13) by an applicant for a second or subsequent moneylender's licence in respect of a refusal to grant such licence or by a holder of a moneylender's licence in respect of a suspension, revocation or variation of the terms or conditions of a moneylender's licence, the refusal, suspension, revocation or variation shall stand suspended until the appeal is determined or withdrawn and notwithstanding subsection (7) any moneylender's licence held by the applicant at the time of the appeal shall continue in force until the determination or withdrawal of the appeal.
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(17)On the hearing of an appeal under subsection (13) in relation to a decision of the Director to refuse to grant, suspend, revoke or vary the terms or conditions of, a moneylender's licence, the Circuit Court may either confirm the decision or allow the appeal and, where an appeal is allowed, the Director shall grant the licence or shall not suspend, revoke or vary the terms or conditions of the licence, as the case may be.
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(18)A decision of the Circuit Court on an appeal under subsection (13) shall be final save that, by leave of the Court, an appeal from the decision shall lie to the High Court on a specified question of law.
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(19)In an appeal under subsection (13) the Director shall not be awarded or ordered to pay costs.
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Obligation on moneylender to display licence.
\n
94.—The holder of a moneylender's licence shall display in a prominent position an authorised copy of the licence and any terms or conditions attached thereto in any premises where the holder engages in the business of moneylending. “Moneylending agreement” to be stated in agreement.
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95.—A moneylender shall ensure that any moneylending agreement to which he is a party shall contain in a prominent position the words “Moneylending agreement”.
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Prohibition on alteration or falsification of moneylender's licence.
\n
96.—(1) A person, other than the Director or an officer of the Director acting on behalf of the Director, shall not alter or attempt to alter a moneylender's licence or an authorised copy thereof.
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(2)A person shall not falsify or attempt to falsify a moneylender's licence or an authorised copy thereof.
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Moneylender to issue authorisation to persons engaging in moneylending on his behalf off business premises.
\n
97.—(1) A holder of a moneylender's licence shall issue, in writing and in such form as may be specified by the Director, to any person engaging in the business of moneylending on his behalf, at a place other than a business premises of the holder used for moneylending, authorisation to so engage, signed by or on behalf of the licence holder.
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(2)An authorisation issued under subsection (1) shall cease to have effect should the moneylender who issued it cease to be the holder of a moneylender's licence.
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(3)A person shall not engage in the business of moneylending on behalf of the holder of a moneylender's licence at a place other than the business premises of the holder unless he holds an authorisation issued under subsection (1).
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(4)A person shall not alter, deface or falsify or attempt to alter, deface or falsify an authorisation issued under subsection (1).
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(5)In any proceedings for an offence for contravening subsection (3) it shall be a defence for the accused to show that he had reasonable grounds to believe that any authorisation issued to him to engage in moneylending on behalf of a moneylender was bona fide issued under this section and in force.
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Prohibition on engaging in business of moneylending without licence.
\n
98.—(1) A person shall not engage in the business of moneylending on his own behalf unless— (a) he is the holder of a moneylender's licence, and (b) he maintains a business premises for that purpose which is not used as a residence by any person.
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(2)A person shall not engage in the business of moneylending on behalf of a moneylender who is not the holder of a moneylender's licence.
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(3)Where a member of the Garda Síochána has reasonable cause to suspect that a person in a public place is engaging in the business of moneylending in contravention of this section, the member may, without warrant, stop, question, search (if need be by force) and remove from that person any documents or money which the member reasonably believes may be in that person's possession for the purpose of moneylending.
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(4)A person shall not obstruct or interfere with a member of the Garda Síochána acting under subsection (3) or give to a member information which is false or misleading.
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(5)A person shall comply with any request made of him by a member of the Garda Síochána under subsection (3).
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(6)In this section “public place” means any place to which the public have access whether as of right or by permission and whether subject to or free of charge; and the doorways, entrances and gardens abutting onto a public place and any ground or car-park adjoining and open to a public place shall be treated as forming part of a public place.
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Loan or other credit to be advanced in full.
\n
99.—Where credit is made available to a borrower by means of a moneylending agreement that credit shall not be reduced by the moneylender or a person acting on his behalf by any amount in respect of: (a) repayment of the credit or any charges related thereto, or (b) repayment of a previous credit or any charge related thereto, and no payment in respect of the credit shall be required of the borrower by the moneylender or a person acting on his behalf before the due date of the first repayment instalment.
\n
Repayment book.
\n
100.—(1) A moneylender shall, in respect of every moneylending agreement, supply to the borrower a book or document (“repayment book”) in which to record repayments made under the agreement which shall be completed and maintained by the moneylender in accordance with this section and shall be separate from the agreement.
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(2)(a) A moneylender shall, in respect of a moneylending agreement, enter in a repayment book before supplying it to a borrower the following information: (i) an agreement number or other reference to enable the agreement to be identified, (ii) the name and address of the moneylender (as specified on his moneylender's licence), (iii) the name and address of the borrower, (iv) the amount of the credit being advanced, (v) the date the credit is advanced, (vi) the amount of each repayment instalment, (vii) the rate of interest to be charged (including the APR expressed as £ per £100 borrowed) on foot of the credit advanced, (viii) the amount of each collection charge (if any), (ix) the number of repayment instalments, (x) the date, or the mode of determining the date, upon which each repayment instalment is payable, (xi) the total amount payable in respect of the loan, and (xii) the date of expiry of the loan. (b) A repayment book shall also include a record of repayments in the form set out in the Sixth Schedule and in which, on the occasion of each repayment, the person to whom the repayment is made shall enter the following: (i) the date the repayment is made, (ii) the amount of the repayment, (iii) the amount still outstanding after deduction of the repayment, and (iv) the signature of the person to whom the repayment is made.
\n
Records to be maintained by moneylender.
\n
101.—(1) A moneylender shall, in respect of every moneylending agreement, made after the commencement of this section, to which the moneylender is a party, keep a record of the agreement which shall include the following information: (a) the agreement number or other reference to identify the agreement, (b) the name and address of the borrower, (c) the amount of the credit advanced under the agreement, (d) the date the credit is advanced, (e) the amount of each repayment instalment, (f) the rate of interest charged including the APR, (g) the amount of each collection charge (if any), (h) the number of instalments, (i) the total amount payable in respect of the loan, and (j) a Schedule showing, in respect of each repayment— (i) the date the repayment is made, (ii) the amount of the repayment, (iii) the amount still outstanding after deduction of the repayment, and (iv) the name of the person to whom the repayment is made.
\n
(2)A moneylender shall retain a record kept under subsection (1) for a period of not less than 5 years after the final repayment instalment under the agreement.
\n
(3)A moneylender or a person acting on his behalf shall not reveal to any person other than to the borrower concerned or a person authorised by the borrower, a court, the Minister, the Director or any authorised officer any of the contents of records maintained by him under this section.
\n
Prohibition on charges for expenses on loans by moneylenders.
\n
102.—(1) A moneylender shall not make or attempt to make an agreement with a borrower who has borrowed or intends to borrow credit from that moneylender for any sum (other than a collection charge), account of costs, charges or expenses incidental to or relating to the negotiations for, or the granting of, the loan.
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(2)If any sum is paid by a borrower who has borrowed or intends to borrow credit from a moneylender for or on account of such costs, charges or expenses that sum shall be recoverable as a debt due to the borrower, or in the event of the loan being completed, shall, if not so recovered, be set off against the amount actually lent and that amount shall be deemed to be reduced accordingly.
\n
Moneylending agreements which include a collection charge.
\n
103.—(1) Where the amount payable under a moneylending agreement includes a collection charge in respect of the payment of repayments at a location other than the business premises of the moneylender, the agreement shall include the following: (a) a clear indication of the amount of that charge, (b) a statement that the borrower shall have the option of making the repayment at the business premises of the moneylender, (c) a statement that if the borrower exercises the option, the charge will not be payable, and (d) a statement that the borrower may indicate his unwillingness to avail of the option by signing a statement to this effect which has been explained to the borrower in a manner specified by the Director, this signature to be additional to the borrower's signature in relation to any of the terms of the agreement.
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(2)A moneylender shall ensure that any moneylending agreement entered into with him complies with this section.
\n
Presumption.
\n
104.—Where in a prosecution for a contravention of this Part it is shown to a court that the accused had in his possession or control any document or sum of money in circumstances which give rise to the reasonable inference that such documents or money were kept for the purpose of moneylending, it shall be presumed, unless the contrary is shown, that the accused, at the time of such possession or control, was engaged in the business of moneylending.
\n
Powers of entry of Garda Síochána.
\n
105.—(1) A member of the Garda Síochána may enter a premises (if need be by reasonable force) at which there are reasonable grounds to suspect that the premises or part of the premises (other than a dwelling) is being used for the purposes of moneylending contrary to this Part or that evidence of an offence for contravening this Part may be found in such premises, and may search and inspect the premises and search and question any person found thereon and may seize and retain any document, money or thing which the member has reason to believe may be evidence of the commission of an offence for contravening this Part.
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(2)A member of the Garda Síochána who enters a premises under subsection (1) may exercise any of the powers conferred on an authorised officer under section 7 .
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(3)A person shall not obstruct or interfere with a member of the Garda Síochána acting under this section or give any information which is false or misleading.
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(4)A person shall comply with any requirement made of him by a member of the Garda Síochána under this section.
\n
Search warrants.
\n
106.—(1) If a judge of the District Court is satisfied on the sworn information of a member of the Garda Síochána that there are reasonable grounds for suspecting that any premises or any part of any premises is being used for the purposes of moneylending contrary to the provisions of this Part or that evidence of an offence for contravening this Part may be found in such premises, the judge may issue a warrant authorising any member of the Garda Síochána, accompanied by other members of the Garda Síochána, at any time or times within one month from the date of issue of the warrant, on production if so requested of the warrant, to enter, if need be by force, and search the premises and any person found therein and question any such person and seize and retain any document or thing which such member has reason to believe may be evidence of the commission of an offence for contravening this Part and arrest any such person who the member has reason to believe has contravened any provision of this Part.
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(2)A person shall not obstruct or interfere with a member of the Garda Síochána acting under the authority of a warrant under subsection (1) or give to a member information which is false or misleading.
\n
(3)A person shall comply with any request made of him by a member of the Garda Síochána acting under the authority of a warrant under subsection (1).
\n
Prohibition on possession of documents belonging to another person for moneylending.
\n
107.—(1) A person shall not have in his possession or control for the purposes of moneylending any document belonging to another person.
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(2)Where a member of the Garda Síochána has reasonable cause to suspect that a person is in possession or control of a document in contravention of subsection (1), the member may without warrant, stop and search (if need be by force) the person and seize the document.
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(3)A person shall not obstruct or interfere with a member of the Garda Síochána acting under subsection (2).
\n
(4)In this section “document” includes every book, card, order, voucher or other document issued to any person.
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Obligation to produce to member of Garda Síochána moneylender's licence or authorisation.
\n
108.—(1) Where a member of the Garda Síochána has reasonable cause to suspect that a person is engaged in the business of money-lending he may require that person to produce his moneylender's licence or authorisation issued under section 97 .
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(2)A person shall not obstruct or interfere with a member of the Garda Síochána acting under subsection (1) and shall comply with any requirement made of him under that subsection.
\n
Powers of arrest.
\n
109.—(1) If a member of the Garda Síochána has reasonable cause to suspect that a person has contravened this section, section 98 , section 107 or 108 , the member may— (a) arrest that person without warrant, or (b) require the person to give his name and address and, if the person fails or refuses to do so or gives a name or address that member reasonably suspects to be false or misleading, the member may arrest that person without warrant.
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(2)A person shall not refuse to give his name or address when required under subsection (1), or give a name or address which is false or misleading.
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Prohibition on collecting repayments at certain times.
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110.—(1) A person shall not engage in the business of collecting repayments whether personally or by his employee or agent— (a) subject to subsection (2), between the hours of 9 o'clock in the evening on any week day and 10 o'clock in the morning on the following day, or (b) at any time on a Sunday or a public holiday (within the meaning of the Holidays (Employees) Act, 1973 ).
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(2)Where the borrower has given his consent in writing, separate from any other document, in the form set out in the Seventh Schedule or such other form as may be prescribed, a moneylender may engage in the collection of repayments whether personally or by his employee or agent between the hours of 8 o'clock and 10 o'clock in the morning on any week day.
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(3)A copy of a consent under subsection (2) shall be— (a) handed personally to the borrower upon giving such consent, or (b) sent to the borrower within 10 days of giving such consent, by the moneylender or his employee or agent.
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(4)A borrower may withdraw any consent given by him under subsection (2) by notifying the moneylender, his employee or agent and, accordingly, any such consent shall be terminated upon receipt of such notification.
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Prohibition on selling goods while collecting repayments.
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111.—A person on the occasion that a cash advance is made to a borrower under a money lending agreement, shall not sell or offer for sale any goods to that borrower.
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Prohibition on increased charges for credit on default.
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112.—A moneylending agreement shall be unenforceable against the borrower if it provides that the rate of charge for the credit may be increased or that any additional charge, other than legal costs, may apply in the event of a default in the payments due under the agreement.
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Continuity of licences granted under Moneylenders Act, 1933.
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113.—Any moneylender's licence granted by the Revenue Commissioners under section 5 of the Moneylenders Act, 1933 (repealed by section 19 ) that is in force immediately before the commencement of section 93 shall continue in force after such commencement for the remainder of the period that such licence was so granted as if it had been granted by the Director under section 93 and that section shall be construed accordingly.
\n
Regulations.
\n
114.—The Minister may prescribe that a person or class of persons shall not be regarded, for the purposes of this Part, as engaging in the business of moneylending.
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PART IX
\n
Housing Loans made by Mortgage Lenders Application of, definitions,
\n
Part IX
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.
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115.—(1) This Part shall apply to a housing loan made by a mortgage lender.
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(2)In this Part— “endowment loan” means a housing loan which is to be repaid out of the proceeds of an insurance policy on its maturity, other than a policy providing mortgage protection insurance only; “information document” means any document, leaflet, notice, circular, pamphlet, brochure, film, video or facsimile issued to the general public or to certain persons (whether solicited or not) for the purpose of giving information in relation to housing loans; “insurance commission” means a payment or other remuneration, reward or benefit in kind, paid or payable by or on behalf of the insurer to any person in connection with the insurance business of the insurer and includes the time allowed by the insurer to that person for the payment by that person to the insurer of premiums received by that person for the insurer for contracts of insurance entered into by the insurer; “insurance intermediary” means an insurance agent or insurance broker within the meaning of the Insurance Act, 1989 ; “insurer” has the meaning assigned to it by the Insurance Act, 1989 ; “mortgage agent” means any or all of the following: (a) a mortgage lender, (b) a mortgage intermediary, (c) an insurer, or (d) an insurance intermediary; “subsidiary” has the same meaning assigned to it by section 155 of the Companies Act, 1963 .
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Mortgage intermediaries.
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116.—(1) A person shall not engage in the business of being a mortgage intermediary unless— (a) he is the holder of an authorisation (“a mortgage intermediaries authorisation”) granted for that purpose by the Director, and (b) he holds an appointment in writing from each undertaking for which he is an intermediary.
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(2)A holder of an authorisation shall only engage in the business of being a mortgage intermediary in the name specified in the holder's authorisation.
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(3)An application for an authorisation shall be in writing and in such form as the Director may determine and shall contain— (a) the true name of the applicant, (b) the name under which the applicant trades, (c) the name of any undertaking for which the applicant acts or intends to act as a mortgage intermediary, (d) the address of any business premises of the applicant to which the application relates, and (e) such other information that the Director may require.
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(4)An application for an authorisation shall be accompanied by a fee of— (a) £500 in the case of a company or a partnership, or (b) £250 in the case of a sole trader.
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(5)Any of the fees referred to in subsection (4) may by regulations be varied.
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(6)A person shall not wilfully give any information which is false or misleading in respect of an application for an authorisation.
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(7)An authorisation shall be valid for the period of 12 months commencing on the date specified therein and shall expire at the end of that period.
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(8)An authorisation shall state— (a) the true name of the holder, (b) the name under which the holder is authorised to engage in the business of being a mortgage intermediary, (c) the address of the business premises of the holder, and (d) the name of any undertaking for which the holder acts as a mortgage intermediary.
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(9)The Director may refuse to grant an authorisation on one or more of the following grounds, namely, that: (a) the applicant does not satisfy the condition specified in subsection (1) (b), (b) the applicant or any business with which he was connected was, during the previous 5 years, convicted of a criminal offence, (c) the applicant is the holder of— (i) a bookmaker's licence issued under the Betting Act, 1931 , (ii) a licence for the sale of intoxicating liquor granted under the Licensing Acts, 1833 to 1994, (iii) a gaming licence issued under the Gaming and Lotteries Act, 1956 , (iv) a pawnbroker's licence granted under the Pawnbrokers Act, 1964 , as amended by this Act, or (v) a moneylender's licence, (d) the applicant has failed to provide a current Revenue tax clearance certificate in respect of himself or his business, (e) the applicant is not or is no longer, in the opinion of the Director, a fit and proper person to carry on the business of mortgage intermediary, or (f) the applicant has failed to comply with regulations made under subsection (10).
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(10)Regulations may provide that the holder of an authorisation shall not act or hold himself out to be a mortgage intermediary unless he effects a policy of professional indemnity insurance in a specified form, indemnifying him to such sum, in such manner, in respect of such matters and valid for such minimum period as the Minister may prescribe.
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(11)The Director may suspend or revoke an authorisation if he is satisfied that since becoming the holder of an authorisation, a mortgage intermediary or any business with which he is connected has been convicted of a criminal offence or a mortgage intermediary has become the holder of a licence referred to in subsection (9) (c) or has failed to comply with any regulations made under subsection (10).
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(12)Whenever the Director proposes to refuse to grant, suspend or revoke an authorisation he shall notify the applicant or the holder of the authorisation, as the case may be, of his proposal and shall, if any representations are made to him in writing by such applicant or holder within 14 days of the notification, consider the representations.
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(13)Whenever the Director, having considered any representations that may have been made under subsection (12), decides to refuse to grant, suspend or revoke an authorisation, he shall notify the applicant for, or as the case may be, the holder of, the authorisation of the decision and the grounds for such decision and such applicant or holder may, within 7 days of receipt of such notification, appeal against such decision to the judge of the Circuit Court within whose Circuit the business to which the authorisation relates is to be carried on.
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(14)A notification referred to in subsection (12) or (13) shall be delivered personally or sent by pre-paid registered post to the business address of the applicant for an authorisation or the holder of the authorisation concerned, as the case may be.
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(15)Where a notification under subsection (12) or (13) relates to a refusal to grant a second or subsequent authorisation or a suspension or revocation of an authorisation, the refusal, suspension or revocation shall take effect upon the expiration of the 7 days allowed for the appeal.
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(16)Where an appeal is made under subsection (13) by an applicant for a second or subsequent authorisation in respect of a refusal to grant such authorisation or by a holder of an authorisation in respect of a suspension or revocation of an authorisation, the refusal, suspension or revocation shall stand suspended until the appeal is determined or withdrawn and, notwithstanding subsection (7), any authorisation held by the applicant at the time of the appeal shall continue in force until the determination or withdrawal of the appeal.
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(17)On the hearing of an appeal under subsection (13) in relation to a decision of the Director to refuse to grant, suspend or revoke an authorisation, the Circuit Court may either confirm the decision or allow the appeal and, where an appeal is allowed, the Director shall grant the authorisation or shall not suspend or revoke the authorisation, as the case may be.
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(18)A decision of the Circuit Court on an appeal under subsection (13) shall be final save that, by leave of that Court, an appeal from the decision shall lie to the High Court on a specified question of law.
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(19)In an appeal under subsection (13) the Director shall not be awarded or ordered to pay costs.
\n
(20)In this section “authorisation” means a mortgage intermediaries authorisation.
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Obligation to display copy of mortgage intermediaries authorisation.
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117.—The holder of a mortgage intermediaries authorisation shall display in a prominent position in any premises where the holder engages in the business of being a mortgage intermediary— (a) an authorised copy of the authorisation, and (b) a notice stating clearly the name of any undertaking for whom the holder acts as a mortgage intermediary.
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Prohibition on alteration or falsification of mortgage intermediaries authorisation.
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118.—(1) A person, other than the Director or an officer of the Director acting on behalf of the Director, shall not alter or attempt to alter a mortgage intermediaries authorisation or an authorised copy thereof.
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(2)A person shall not falsify or attempt to falsify a mortgage intermediaries authorisation or an authorised copy thereof.
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Amendment of mortgage intermediaries authorisation.
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119.—Where the holder of a mortgage intermediaries authorisation ceases to act on behalf of any undertaking specified in the authorisation or commences to act as a mortgage intermediary on behalf of any undertaking not specified in the authorisation, the holder shall upon such cessation or commencement inform in writing the Director of the change and forward the authorisation to the Director, and the Director shall accordingly, as he sees fit, amend the authorisation or issue another authorisation incorporating the change.
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Regulations.
\n
120.—The Minister may prescribe that a person or class of persons shall not be regarded, for the purposes of this Part, as being a mortgage intermediary.
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Redemption of housing loans.
\n
121.—(1) Subject to subsection (3), a borrower may, at any time before the time agreed, repay to the mortgage lender the whole or any part of a housing loan and shall not be liable to pay any redemption fee in relation to the loan or any part of the loan.
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(2)The exemption from redemption fees in subsection (1) shall not apply to a housing loan in respect of which the mortgage or loan agreement provides that the rate of interest: (a) may not be changed, or (b) may not be changed over a period of at least one year, or (c) may not, for a period of at least 5 years, exceed the rate applicable on the date of the making of the said agreement by more than 2 per cent.
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(3)The exemption from redemption fees in subsection (1) shall apply at any time during the period of the loan at which the period referred to in paragraph (b) or (c) of subsection (2) have elapsed.
\n
(4)The Minister may, by regulations, after consultation with the Director and the Minister for the Environment, vary— (a) the period referred to in subsection (2) (b), or (b) the period of years or the rate of interest referred to in subsection (2) (c).
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(5)A mortgage agent shall, where a redemption fee is payable on a housing loan by virtue of subsection (2), ensure that a statement to that effect, specifying how the amount of such fee is to be calculated, shall be included in or attached to: (a) any information document which refers or relates to such a loan, (b) any application form issued for the purpose of applying for such a loan or, where application for the loan is made otherwise than by way of an application form, such a statement shall be sent to the applicant within 10 days of the receipt of the application, (c) any document sent to the applicant approving the loan, and (d) any communication in relation to a variation of, or any offer to vary, the terms of the housing loan which would have the effect of making the loan liable to a redemption fee in accordance with subsection (2).
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(6)In this section “redemption fee” means, in relation to a housing loan, any sum in addition to principal and any interest due on such principal (without regard to the fact of the redemption of the loan) at the time of redemption of the whole or part of the loan.
\n
Criteria for calculation of APR in relation to housing loans.
\n
122.—(1) For the purpose of calculating the APR in relation to a housing loan the total cost of credit to the borrower shall be determined with the exception of the following charges— (a) charges other than the purchase price which the consumer is obliged to pay whether the transaction is paid for in cash or by credit including Government duties or taxes on the purchase or acquisition of the property, and fees payable by the borrower to his own agent for the carrying out of legal and other procedures associated with the acquisition of the property, (b) charges payable by the borrower for non-compliance with any of his commitments laid down in the credit agreement, (c) charges for insurance on the life of the borrower or for insurance against property damage which are designed to ensure payment to the creditor of credit outstanding in the event of the death of the borrower, or insurable damage to the property the subject of the credit agreement, before termination of the agreement.
\n
(2)In calculating the APR in relation to a housing loan, the following assumptions shall be made: (a) the creditor and the prospective borrower fulfil their obligations under the terms of the contract, (b) in the case of credit agreements providing for variations in the rate of interest or other charges which are unquantifiable at the time of calculation, the APR shall be calculated on the assumption that the future rates of interest or charges are the current variable rates which will remain fixed and will apply until the end of the credit agreement. In circumstances in which the initial or subsequent interest rate is fixed for a specific period or periods, the calculation shall assume that the fixed rate or rates shall apply only for the period or periods specified and that the rates applicable to other periods of the contract are the current variable rates which will remain fixed for those periods, (c) that the borrower is not entitled to any income tax relief or any other benefit not granted by the creditor under, or relating to, the transaction, (d) where charges are payable at an unspecified date after the agreement is signed it shall be assumed that they are payable at the beginning of the agreement, (e) in the case of advertising, the calculation shall be based on a typical example.
\n
(3)A mortgage lender shall comply with the requirements of this section in relation to the calculation of the APR in respect of a housing loan.
\n
Valuation reports.
\n
123.—(1) Where a mortgage lender— (a) gives approval to the making of a housing loan; or (b) refuses to make a housing loan, the applicant for the loan shall, at the time he is notified of the approval of the loan or of the refusal to give such approval, be furnished by the mortgage lender with a copy of the report (“valuation report”) made to the mortgage lender on the value of the security.
\n
(2)The mortgage lender shall attach to or include in every valuation report furnished to an applicant in accordance with subsection (1) a note stating clearly the nature and purpose of the report.
\n
(3)There shall be no charge made to the applicant for a valuation report if the loan application is refused.
\n
Insurance of mortgaged property.
\n
124.—(1) Any insurance which a mortgage lender may require a borrower to effect and keep effected on property mortgaged to the lender may be effected by the borrower with any insurer and through any intermediary.
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(2)When the mortgage lender requires a borrower to effect such insurance for the first time as respects a mortgaged property, he shall, at the same time, notify him in writing that the insurance may be so effected and of the nature and extent of the required insurance.
\n
(3)A mortgage lender shall not impose a requirement in regard to the nature and extent of insurance on mortgaged property which differentiates as between insurance effected through the agency of the mortgage lender and insurance otherwise effected.
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(4)A mortgage lender shall not impose a condition on a borrower in relation to insurance on mortgaged property which would require the borrower to pay a fee to the mortgage lender or to incur a cost which, in either case, would not be paid or incurred by a borrower effecting insurance through the agency of the mortgage lender.
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Costs of legal investigation of title.
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125.—Any costs incurred by a mortgage lender in respect of, arising from or in connection with, the legal investigation of title to any property offered as security by a borrower shall be paid by the mortgage lender and shall not be recoverable from the borrower either as a fee specifically stated to be in respect of such costs or as part of any fee or other charge in respect of the loan.
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Mortgage protection insurance.
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126.—(1) Subject to the provisions of this section, a mortgage lender shall arrange, through an insurer or an insurance intermediary, a life assurance policy providing, in the event of the death of a borrower before a housing loan made by the mortgage lender has been repaid, for payment of a sum equal to the amount of the principal estimated by the mortgage lender to be outstanding in the year in which the death occurs on the basis that payments have been made by the borrower in accordance with the mortgage, such sum to be employed in repayment of the principal.
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(2)Subsection (1) shall apply as respects all housing loans except— (a) where the house in respect of which the loan is made is, in the mortgage lender's opinion, not intended for use as the principal residence of the borrower or of his dependants, (b) loans to persons who belong to a class of persons which would not be acceptable to an insurer, or which would only be acceptable to an insurer at a premium significantly higher than that payable by borrowers generally, (c) loans to persons who are over 50 years of age at the time the loan is approved, (d) loans to persons who, at the time the loan is made, have otherwise arranged life assurance, providing for payment of a sum, in the event of death, of not less than the sum referred to in subsection (1).
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(3)A person who does not belong to a class referred to in paragraph (b) of subsection (2) shall not be required by virtue of this section to undergo a medical examination as a condition of a policy but nothing in this section shall prevent a person belonging to such a class from being required to undergo a medical examination.
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(4)A policy under this section may, in the case of a loan made jointly to two or more borrowers, apply to such of the borrowers as may be designated by the mortgage lender, due regard being had to the wishes of such borrowers.
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(5)Where the proceeds of a policy under this section exceed the amount due to the mortgage lender on the loan, any such excess shall be payable to the surviving borrower or to the estate of the deceased borrower as the case may be.
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Prohibition on linking of services.
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127.—(1) A mortgage agent shall not make or offer to make to any person, or arrange or offer to arrange for any person, a housing loan which would be subject to a condition that any financial services, conveyancing services, auctioneering services or other services relating to land which that person may require, whether or not in connection with the loan, shall be provided by the agent or through a subsidiary or other associated body of such agent.
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(2)Where, in connection with the making or arranging of a housing loan, more than one service is made available by a mortgage agent or one or more of his subsidiaries, the agent shall not, and shall ensure that each of his subsidiaries does not, make the services available on terms other than terms which distinguish the consideration payable for each service so made available; nor shall any of the subsidiaries make the services available on terms other than terms which make that distinction.
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(3)Where a person is providing auctioneering services, or constructing houses for sale, and is also a mortgage intermediary, he, or a subsidiary or other associated body, shall not sell, offer to sell or arrange to sell a house which is to be purchased with the aid of a housing loan, on terms which differentiate as between a person who purchases the house with the aid of a housing loan arranged by or on behalf of such intermediary and a person who purchases the house with the aid of a housing loan otherwise arranged.
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Warning on loss of home.
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128.—(1) A mortgage agent shall ensure that— (a) an information document, (b) an application form for a housing loan, or (c) any document approving a housing loan, shall include the following notice: “WARNING YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS ON A MORTGAGE OR ANY OTHER LOAN SECURED ON IT.”.
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(2)A mortgage agent shall ensure that, where the interest rate for a housing loan is variable— (a) an information document, (b) an application, or (c) any document approving that loan, shall, following the notice required under subsection (1), include the following: “THE PAYMENT RATES ON THIS HOUSING LOAN MAY BE ADJUSTED BY THE LENDER FROM TIME TO TIME.”.
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Notice of important information to be included in a housing loan agreement.
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129.—(1) An agreement for a housing loan shall contain on the front page a notice in the form set out in
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Part II
\n
of the Third Schedule or such other form as may be prescribed.
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(2)A mortgage lender who is a party to an agreement referred to in subsection (1) shall ensure that the agreement complies with that subsection.
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Duties of mortgage lender to supply documents and information.
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130.—A mortgage lender shall in respect of a housing loan, issue to the borrower: (a) at the time the loan is made, or as soon as may be practicable thereafter a copy of the mortgage deed (including any contract relating thereto) which copy shall be additional to any copy of such mortgage deed issued to his legal representative, and (b) a statement of the total amount outstanding on the loan on a specified date occurring not more than one year after the making of the loan and at intervals of not more than one year thereafter until the loan is fully repaid, such statement being issued as soon as practicable after the date specified.
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Disclosure of charges, agency introduction fees, commissions and expenses.
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131.—(1) The Minister may, after consultation with the Minister for the Environment, by regulations, make provision requiring the disclosure to the borrower of specified information relating to any insurance commission, introduction fee or other inducement, charge or expense that may be payable to any person or retained by any person on foot of an insurance policy taken out by the borrower in connection with the making of a housing loan, or on foot of the making of such loan.
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(2)Regulations under this section may in particular specify: (a) the nature of the information to be disclosed, including information on the manner in which any commission, fee, or other inducement, charge or expense is to be determined, the amount or value of same and the arrangements for the payment or provision of same, (b) the circumstances in which and the time at which the information is to be disclosed, (c) the manner of disclosure of the information.
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(3)(a) Subsection (2) is without prejudice to the generality of subsection (1) and accordingly regulations under this section may make provision for matters other than those mentioned in subsection (2) or further provision as to any of the matters there mentioned. (b) Regulations made under this section may: (i) include such consequential, incidental, transitional or supplementary provisions as may be considered appropriate by the Minister to be necessary or proper for the purposes of this section; (ii) apply either generally or by reference to a specified class or classes of loans, insurance, mortgage agents, or persons or by reference to any other matter that is considered appropriate by the Minister.
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(4)Where, in connection with the making of a housing loan, a mortgage lender or mortgage intermediary acts exclusively for a particular insurer, he shall at the first reasonable opportunity and in any event before any commitment is made by the borrower, disclose this fact to the borrower.
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(5)Where, in connection with the making of a housing loan, a mortgage intermediary acts exclusively for a particular mortgage lender, he shall at the first reasonable opportunity and in any event before any commitment is made by the borrower, disclose this fact to the borrower.
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Disclosure of other fees.
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132.—Where a fee is payable by an applicant for a housing loan in respect of any of the following matters— (a) the making, accepting or administering of an application for a loan, (b) the valuation of the security for the loan, (c) legal services in connection with the loan, (d) services provided by a mortgage agent in relation to the loan, or (e) non-acceptance of an offer or approval of a loan, the mortgage agent shall ensure that a statement of reasonable prominence that such a fee is payable and specifying the amount of the fee or how such amount is determined and the circumstances in which it may be refunded, if such is the case shall be included in or attached to: (i) any information document issued by or on behalf of the mortgage agent which refers or relates to such a loan, (ii) any application form issued for the purposes of applying for such a loan or, where application for the loan is made otherwise than by way of an application form, issued to the applicant within 10 days of the receipt of the application, and (iii) any document sent to the applicant approving the loan, in relation to the matters specified in paragraphs (b), (c), (d) and (e).
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Endowment loans.
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133.—(1) A mortgage agent shall ensure that an information document which refers or relates to an endowment loan, an application form issued to a person for the purpose of applying for such a loan, and any document approving such a loan shall contain in a prominent position the following notice: “WARNING THERE IS NO GUARANTEE THAT THE PROCEEDS OF THE INSURANCE POLICY WILL BE SUFFICIENT TO REPAY THE LOAN IN FULL WHEN IT BECOMES DUE FOR REPAYMENT.”.
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(2)Where an application for an endowment loan is made, otherwise than by way of an application form, the applicant shall be supplied by the mortgage agent with a notice in accordance with subsection (1) within 10 days of the receipt of the application.
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(3)Subsections (1) and (2) shall not apply where the insurer underwriting the insurance policy in respect of an endowment loan guarantees that the proceeds of the policy at the initial premium will be sufficient to repay the loan in full when it becomes due for repayment or where the mortgage lender undertakes to accept the proceeds in full and final settlement of the loan debt.
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(4)Where there is a possibility that, during the lifetime of an endowment loan, the borrower may be required or advised by the insurer or mortgage lender to increase the amount of the premium payments on the insurance policy relating to the loan, in order to secure an increase in the proceeds of the policy on maturity, then the document sent to the applicant approving the loan shall contain a statement of this possibility in a prominent position.
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(5)Where the possibility exists that early surrender of the insurance policy in respect of an endowment loan may result in a return to the consumer which would be less than he has paid in premia and other charges, any document refered to in subsection (1) shall contain a statement of this possibility.
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(6)An insurer underwriting an insurance policy in respect of an endowment loan shall within 5 years of the policy being issued and every 5 years thereafter, until such time as the endowment loan is repaid, issue or cause to be issued to the borrower, a statement setting out the value of the policy as estimated by the insurer, at such date together with a comparison of this valuation to the valuation at such date projected at the time the policy was first written, and a revised estimate of its valuation at maturity.
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Disclosure of interest rate and penalties to be applied to arrears on housing loans.
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134.—(1) Where it is the policy of a mortgage lender to charge interest in respect of arrears on housing loans or on housing loans of a particular type the mortgage lender shall ensure that, any information document relating to, application form for, or document approving, such a loan and any communication in relation to arrears of payments due on such a loan shall state the amount of the increase in interest and other charges which a borrower may become liable to pay in respect of such arrears.
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(2)Any communication issued by or on behalf of a mortgage lender to a borrower which refers to the possibility of possession proceedings being taken under the mortgage, shall contain an estimate of the cost to the borrower of such proceedings.
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Advertising of housing loans.
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135.—(1) The Director may, if he considers it expedient to do so give a direction to a mortgage agent in relation to the matter and form of any advertisement or information document displayed or published by or on behalf of such agent in relation to a housing loan and may direct that such advertisement or information document be withdrawn.
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(2)Without prejudice to the generality of subsection (1), a direction under this section may do all or any one or more of the following— (a) prohibit the issue by a mortgage agent of advertisements or information documents of any specified description, (b) require a mortgage agent to modify advertisements or information documents of a specified description in a specified manner, (c) prohibit the issue by a mortgage agent of any advertisements or information documents which are, or are substantially, repetitions of a specified advertisement or information document, (d) require a mortgage agent to withdraw any specified advertisement or information document or any advertisement or information document of a specified description, or (e) require a mortgage agent to include specified information in any advertisement or information document to be published by it or on its behalf or in any statement to the public made by it or on its behalf.
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(3)Any mortgage agent so directed under subsection (1) shall comply with the direction.
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(4)Where the Director intends to give a direction under this section in relation to a bank or building society he shall inform the Central Bank of his intention not later than the time on which the direction is given.
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Protection of borrower on a winding-up.
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136.—(1) Where a mortgage lender (being a corporate entity) is being wound-up, a borrower shall not be liable to pay the amount payable in respect of a housing loan except at the time or times, and subject (as may be appropriate) to the conditions, set out in the mortgage or other security.
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(2)A liquidator in the exercise of his powers under section 231
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(2)(a) of the Companies Act, 1963 , shall not dispose of any of the mortgage lender's assets constituting housing loans on terms as respects the loans other than terms which the High Court is satisfied are just and equitable and which the borrowers would have been reasonably entitled to expect if the mortgage lender had not been wound-up.
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PART X
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Miscellaneous Regulations in relation to duty to display information.
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137.—Regulations may require a person who engages in the business of providing financial accommodation to or securing the provision of financial accommodation for a consumer to display in the prescribed manner at any premises where the business is carried on and to which the public have access prescribed information about that business relating to the provision of financial accommodation.
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Restrictions as to use of inertia selling provisions in agreements.
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138.—(1) A person shall not insert in any agreement or in any proposal form or application form used in connection with the agreement provisions which require the consumer to indicate positively that he does not wish to obtain credit, purchase or hire any goods or avail of any service in relation to the agreement.
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(2)Where any amount is due to a third party as a result of the use of a provision as described in subsection (1), the person who inserted the provision shall be liable for payment of that amount.
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Circulars to minors.
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139.—A person shall not knowingly, with a view to financial gain, send to a minor any document inviting the minor to— (a) borrow credit, (b) obtain goods on credit or hire, (c) obtain services on credit, or (d) apply for information or advice on borrowing credit or otherwise obtaining credit or hiring goods.
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Prohibition on exclusion of obligations or rights in agreements.
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140.—Except where otherwise provided for in this Act, a creditor or an owner— (a) shall not, in any agreement— (i) exclude or restrict any liability imposed on any person or any right conferred on a consumer, or (ii) impose any further liability in addition to any liability imposed on a consumer, by this Act, and (b) shall not be entitled to enforce any agreement (other than a housing loan) which so excludes or restricts any such liability or imposes any such further liability.
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Statements purporting to exclude or restrict liabilities or rights.
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141.—A person shall not in the course of a business do any of the following: (a) display on any part of any premises a notice, (b) publish or cause to be published an advertisement, (c) supply goods bearing or goods in a container bearing a statement, or (d) furnish or cause to be furnished a document, which purports to exclude or restrict any liability imposed on any person or any right conferred on a consumer by this Act.
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Duty to disclose information concerning financial standing of consumer.
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142.—(1) Where a creditor or an owner refuses to enter into an agreement with a consumer, he shall disclose to the consumer the name and address of any person from whom he sought information concerning the financial standing of the consumer who gave information which influenced the refusal, within 14 days after receiving a request in writing to that effect from the consumer.
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(2)Subsection (1) does not apply to a request— (a) received more than 28 days after the refusal, or (b) which relates to information to which the Data Protection Act, 1988 , applies being data within the meaning of that Act.
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(3)Subject to subsection (4), a person who has supplied information to a creditor or an owner in respect of the financial standing of a consumer in respect of an agreement shall give to the consumer a copy in legible form of any information held by that person concerning the financial standing of the consumer, within 14 days after receiving a request in writing to that effect from the consumer, together with a fee of £5, or such other amount (if any) as may stand specified in regulations.
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(4)Subsection (3) does not apply to a request— (a) received more than 28 days after the name and address referred to in subsection (1) has been given, or (b) which relates to information to which the Data Protection Act, 1988 , applies being data within the meaning of that Act.
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Correction of incorrect information.
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143.—(1) Where a consumer has been given information under section 142 which he considers is incorrect the consumer may within 28 days of receipt give notice to the person requiring the removal or the amendment of the information.
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(2)A person referred to in subsection (1) shall within 28 days after receiving a notice under that subsection inform the consumer that he has— (a) removed the information, (b) amended the information, or (c) taken no action.
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(3)Where the consumer concerned feels aggrieved by any action taken by a person under subsection (1) he may request in writing, together with a fee of £10 or such other amount (if any) as may stand specified in regulations, the Director to investigate the matter.
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(4)Where the Director having considered a request under subsection (3) decides to investigate the matter he may make any such direction as he considers appropriate in relation to the information concerned and a person to whom such direction is given shall comply with the direction.
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PART XI
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Credit Intermediaries Credit intermediaries.
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144.—(1) Subject to subsection (2), a person shall not engage in the business of being a credit intermediary unless— (a) (i) he is the holder of an authorisation (“a credit intermediaries authorisation”) granted for that purpose by the Director, and (ii) he holds a letter of recognition from each undertaking for which he is a credit intermediary, or (b) he is the holder of a mortgage intermediaries authorisation under section 116 .
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(2)The provisions of subsection (1) do not apply to a person who holds a written authorisation under section 97 , which is for the time being in force, and who, apart from the business to which that authorisation relates, is not otherwise engaged in the business of being a credit intermediary.
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(3)A holder of an authorisation shall only engage in the business of being a credit intermediary in the name specified in the holder's authorisation.
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(4)An application for an authorisation shall be in writing and in such form as the Director may determine and shall contain— (a) the true name of the applicant, (b) the name under which the applicant trades, (c) the name of any undertaking for which the applicant acts or intends to act as a credit intermediary, (d) the address of any business premises of the applicant to which the application relates, and (e) such other information that the Director may require.
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(5)An application for an authorisation shall be accompanied by a fee of— (a) £500 in the case of a company or a partnership, or (b) £250 in the case of a sole trader.
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(6)Any of the fees referred to in subsection (5) may by regulations be varied.
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(7)An authorisation shall be valid for the period of 12 months commencing on the date specified therein and shall expire at the end of that period.
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(8)An authorisation shall state— (a) the true name of the holder, (b) the name under which the holder is authorised to engage in the business of being a credit intermediary, (c) the address of the business premises of the holder, and (d) the name of each of the undertakings for which he acts as a credit intermediary.
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(9)The Director may refuse to grant an authorisation on one or more of the following grounds, namely, that— (a) the application does not satisfy the conditions specified in subsection (1) (a) (ii), (b) the applicant or any business with which he was connected was, during the previous 5 years, convicted of a criminal offence, (c) the applicant is the holder of— (i) a bookmaker's licence issued under the Betting Act, 1931 , (ii) a licence for the sale of intoxicating liquor granted under the Licensing Acts, 1833 to 1994, (iii) a gaming licence issued under the Gaming and Lotteries Act, 1956 , (iv) a pawnbroker's licence granted under the Pawnbrokers Act, 1964 , as amended by this Act, or (v) a moneylender's licence, (d) the applicant has failed to provide a current Revenue tax clearance certificate in respect of himself or his business, (e) the applicant is not, or is no longer, in the opinion of the Director, a fit and proper person to carry on the business of credit intermediary, or (f) the applicant has failed to comply with any regulations made under subsection (10).
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(10)Regulations may provide that the holder of an authorisation shall not act or hold himself out to be a credit intermediary unless he effects a policy of professional indemnity insurance in a specified form, indemnifying him to such sum, in such manner, in respect of such matters and valid for such minimum period as the Minister may prescribe.
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(11)The Director may suspend or revoke an authorisation if he is satisfied that since becoming the holder of an authorisation, a credit intermediary or any business with which he is connected has been convicted of a criminal offence or a credit intermediary has become the holder of a licence referred to in subsection (9) (c) or has failed to comply with any regulations made under subsection (10).
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(12)Whenever the Director proposes to refuse to grant, suspend or revoke an authorisation he shall notify the applicant or the holder of the authorisation, as the case may be, of his proposal and shall, if any representations are made to him in writing by such applicant or holder within 14 days of the notification, consider the representations.
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(13)Whenever the Director, having considered any representations that may have been made under subsection (12), decides to refuse to grant, suspend or revoke an authorisation, he shall notify the applicant for, or as the case may be, the holder of the authorisation, of the decision and such applicant or holder may, within 7 days of receipt of such notification, appeal against such decision to the judge of the Circuit Court within whose Circuit the business to which the authorisation relates is to be carried on.
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(14)A notification referred to in subsection (12) or (13) shall be delivered personally or sent by pre-paid registered post to the business address of the applicant for an authorisation or the holder of the authorisation concerned, as the case may be.
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(15)Where a notification under subsection (12) or (13) relates to a refusal to grant a second or subsequent authorisation or a suspension or revocation of an authorisation, the refusal, suspension or revocation shall take effect upon the expiration of the 7 days allowed for the appeal.
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(16)Where an appeal is made under subsection (13) by an applicant for a second or subsequent authorisation in respect of a refusal to grant such authorisation or by a holder of an authorisation in respect of a suspension or revocation of an authorisation, the refusal, suspension or revocation shall stand suspended until the appeal is determined or withdrawn and notwithstanding subsection (7) any authorisation held by the applicant at the time of the appeal shall continue in force until the determination or withdrawal of the appeal.
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(17)On the hearing of an appeal under subsection (13) in relation to the decision of the Director to refuse to grant, suspend or revoke an authorisation, the Circuit Court may either confirm the decision or allow the appeal and, where an appeal is allowed, the Director shall grant the authorisation or shall not suspend or revoke the authorisation, as the case may be.
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(18)A decision of the Circuit Court on an appeal under subsection (13) shall be final save that, by leave of that Court, an appeal from the decision shall lie to the High Court on a specified question of law.
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(19)In an appeal under subsection (13) the Director shall not be awarded or ordered to pay costs.
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(20)In this section “authorisation” means a credit intermediaries authorisation.
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Obligation to display copy of credit intermediaries authorisation.
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145.—The holder of a credit intermediaries authorisation shall display in a prominent position in any premises where the holder engages in the business of being a credit intermediary— (a) an authorised copy of the authorisation, and (b) a notice stating clearly the name of any undertaking for whom the holder acts as a credit intermediary.
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Prohibition on alteration or falsification of credit intermediaries authorisation.
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146.—(1) A person, other than the Director or an officer of the Director acting on behalf of the Director, shall not alter or attempt to alter a credit intermediaries authorisation or an authorised copy thereof.
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(2)A person shall not falsify or attempt to falsify a credit intermediaries authorisation or any authorised copy thereof.
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Amendment of credit intermediaries authorisation.
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147.—(1) Where the holder of a credit intermediaries authorisation ceases to act on behalf of any undertaking specified in the authorisation or commences to act as a credit intermediary on behalf of any undertaking not specified in the authorisation, the holder shall upon such cessation or commencement inform in writing the Director of the changes and forward the authorisation to the Director, and the Director shall accordingly, as he sees fit, amend the authorisation or issue another authorisation incorporating the change.
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(2)The holder of a credit intermediaries authorisation to whom subsection (1) applies shall comply with the requirements of that subsection.
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Nature of “finance arranged” to be explained to consumer.
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148.—Where a consumer negotiates with a seller in respect of the acquisition of goods and the seller, being a credit intermediary, offers, or is requested by the consumer, to arrange a financial accommodation for the consumer in respect of the acquisition of the goods, the seller shall, as soon as may be reasonable, before any agreement, in relation to the goods under negotiation resulting from the offer or request, is entered into, disclose in writing to the consumer— (a) the nature of the financial accommodation, (b) the amount, number and frequency of payments and the total amount that the consumer would have to pay under an agreement, and, where applicable, the APR, (c) who has the property in the goods during the agreement, (d) the name of any undertaking for which the seller acts as a credit intermediary, and (e) that the seller receives a commission, payment or consideration of any kind from an undertaking for arranging any such financial accommodation between the consumer and the undertaking.
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PART XII
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Obligation on credit Institutions to Notify Director of all Customer Charges Customer charges, etc., by credit institutions.
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149.—(1) Each credit institution shall, within three months, notify the Director of all charges imposed by it in relation to the provision of any service to a customer or to a group of customers.
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(2)A credit institution or, subject to the Competition Act, 1991 , a group of credit institutions in respect of a service offered jointly by the group, shall notify the Director of every proposal— (a) to increase any charge which has been previously notified to the Director under subsection (1), or (b) to impose any charge in relation to the provision of a service to a customer or to a group of customers, which has not been previously notified to the Director under subsection (1).
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(3)Every notification under subsection (2) shall be accompanied by— (a) subject to subsection (4), such fee as the Director may decide as respects each notification, being not more than a fee of £25,000 or such other amount as may stand specified in regulations, (b) a statement of the commercial justification for the proposal including a detailed statement of cost, and (c) details of the estimated amount of additional income accruing from the proposal.
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(4)The fee referred to in subsection (3) may be waived or reduced by the Director where the payment of the fee would, in the opinion of the Director, be unfair to the credit institution having regard to— (a) the impact of any increase in or imposition of charges on customers, (b) the number of customers affected by any increase in or imposition of charges, (c) the additional income likely to accrue from any increase in or imposition of charges, and (d) any other criteria that he deems appropriate.
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(5)Subject to subsection (6), the Director may within 4 months of receipt of a notification under subsection (2) direct a credit institution— (a) to refrain from imposing or changing a charge in relation to the provision of a service to a customer or to a group of customers, without the prior approval of the Director, and (b) to publish, in such manner as may be specified by the Director from time to time, information on any charge in relation to the provision of a service to a customer or to a group of customers.
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(6)Where a notification under subsection (2) is in respect of a proposal to impose a charge for a new service which was not previously offered to its customers or is being offered as choice to and in a materially different way to existing services, the Director may, within 3 weeks of receipt of the notification, direct the credit institution— (a) to refrain from imposing or changing a charge in relation to the provision of a service to a customer or to a group of customers, without the prior approval of the Director, and (b) to publish, in such manner as may be specified by the Director from time to time, information on any charge in relation to the provision of a service to a customer or to a group of customers.
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(7)A direction under this section may be expressed to apply— (a) to every credit institution or to credit institutions carrying on a specified type of banking or financial business, (b) to all services provided to a customer or to a group of customers by credit institutions or to specified services or to services of a specified kind, or (c) to a specified time or times or during a specified period or periods, and the direction shall— (i) (I) be communicated to every credit institution concerned, and (II) where not communicated in writing, be confirmed in writing to every such credit institution concerned as soon as possible thereafter, and (ii) have effect in accordance with its terms.
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(8)The Director shall, in exercising his powers under this section, have regard to— (a) the promotion of fair competition between— (i) credit institutions, and (ii) credit institutions carrying on a particular type of banking or financial business, (b) the statement of commercial justification referred to in subsection (3) (b), (c) a credit institution passing any costs on to its customers or a group of its customers in proposing to impose or change any charge, in relation to the provision of a service to a customer or a group of its customers, and (d) the effect on customers or a group of customers of any proposal to impose or change any charge in relation to the provision of such service.
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(9)The Director may amend or revoke a subsisting direction under this section and may amend or revoke a subsisting direction which has been amended.
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(10)The Director may exempt a credit institution from the obligation to make a notification under subsection (2) in respect of any charge which has been individually negotiated bona fide with the credit institution by a customer, or by or on behalf of a group of customers, of the credit institution.
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(11)The Director shall— (a) keep under general review the terms and conditions applying to the provision of services to customers by credit institutions, and (b) (i) require a credit institution to discontinue or refrain from the use of such terms and conditions that are, or are likely to be regarded as unfair, and (ii) to institute proceedings in the High Court for an order prohibiting the use, or, as the case may be, the continued use of such terms and conditions if the credit institution fails to comply with a requirement under subparagraph (i).
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(12)In this section— “service” means any service provided by a credit institution to a customer in respect of the following— (a) making and receiving payments, (b) providing foreign exchange facilities, (c) providing and granting credit, (d) maintaining, and administrating transaction accounts used for the services specified by this subsection, including issuing statements, or (e) any other service as may be prescribed; “charge” does not include any rate of interest or any charge, cost or expense levied by a party other than the credit institutions in connection with the provision of the service to the credit institution or the customer and which is to be discharged by the customer.
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Disclosure of information by Director.
\n
150.—The Director shall not disclose during his term of office or at any time thereafter any information concerning the confidential business of a credit institution which may come to his knowledge by virtue of this Part unless such disclosure is to enable him to carry out his functions or is required by a court or made for the purpose of complying with any other enactment.
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PART XIII
\n
Moneylenders, Credit and Mortgage Intermediaries Registers Moneylenders, credit intermediaries and mortgage intermediaries registers.
\n
151.—(1) The Director shall cause to be established and kept the following registers— (a) the moneylenders register of all licences granted under section 93
\n
(1), (b) the credit intermediaries register of all authorisations granted under section 144
\n
(1), (c) the mortgage intermediaries register of all authorisations granted under section 116
\n
(1).
\n
(2)Each of the registers shall be in such form as the Director may from time to time decide.
\n
(3)The moneylenders register shall contain the following particulars— (a) the information referred to in section 93
\n
(8), (b) any revocation, suspension or variation of the terms or conditions of a moneylender's licence, and (c) such other particulars as the Minister may from time to time prescribe.
\n
(4)The credit intermediaries register shall contain the following particulars— (a) the information referred to in section 144
\n
(8), (b) any revocation or suspension of a credit intermediaries authorisation, and (c) such other particulars as the Minister may from time to time prescribe.
\n
(5)The mortgage intermediaries register shall contain the following particulars— (a) the information referred to in section 116
\n
(8), (b) any revocation or suspension of a mortgage intermediaries authorisation, and (c) such other particulars as the Minister, after consultation with the Minister for the Environment may from time to time prescribe.
\n
(6)A person shall at all reasonable times be entitled to make enquiries regarding the contents of any of the registers.
\n
(7)The registers shall at all reasonable times be open to inspection by any person on payment of a fee of such amount (if any) as may from time to time be prescribed.
\n
(8)(a) A person shall be entitled to obtain a copy of or an extract from (including in the case of information in non-legible form, a copy of or extract from such an entry in permanent legible form) an entry in any of the registers on payment to the Director of a fee of not more than £5, or such other amount (if any) as may from time to time be prescribed. (b) The fee referred to in paragraph (a) may be waived or reduced by the Director, at his discretion, in respect of such class or classes of persons as he may decide.
\n
(9)Every document purporting to be a copy of or extract from an entry in any of the registers and purporting to be certified by an officer of the Director to be a true copy of or an extract from such entry shall, without proof of the signature of the officer purporting so to certify or that the person was such officer, be received in evidence in any legal proceedings and shall, until the contrary is shown, be deemed to be a true copy of or extract from such entry and be evidence of the terms of such entry.
\n
(10)In this section “the registers” means the registers established under this section.
\n
PART XIV
\n
Amendment of Sale of Goods and Supply of Services Act, 1980 Amendment of Act of 1980.
\n
152.—The Act of 1980 is hereby amended— (a) by the insertion after the definition of “business” in section 2 (1) of the following definition: “‘consumer-hire agreement’ has the meaning assigned to it by section 2
\n
(1)of the Consumer Credit Act, 1995;”, (b) by the substitution for the definition of “hire-purchase agreement” in section 2 (1) of the following definition: “‘hire-purchase agreement’ has the meaning assigned to it by section 2
\n
(1)of the Consumer Credit Act, 1995;”, and (c) by the insertion in section 54 after “hire-purchase agreement” of “or a consumer-hire agreement”.
\n
PART XV
\n
Amendment of Pawnbrokers Act, 1964 Licensing of pawnbrokers.
\n
153.—The Pawnbrokers Act, 1964 , is hereby amended by the substitution for sections 7 to 10 of the following sections: “Prohibition of carrying on the business of pawnbroker without licence.
\n
7.—(1) A person shall not carry on the business of a pawnbroker at any premises unless he is the holder of a licence which is in force in respect of those premises.
\n
(2)A person who contravenes this section shall be guilty of an offence.
\n
Pawnbroker's licence.
\n
8.—(1) The Director may grant to a person a licence (‘a pawnbroker's licence’) upon such terms and conditions as he sees fit to a person to carry on the business of pawnbroker at a particular premises.
\n
(2)An application for a licence shall be in writing and in such form as the Director may determine and shall be accompanied by a fee of £1,000 or such other amount as may stand specified in regulations made by the Minister.
\n
(3)The Director may refuse to grant a licence on one or more of the following grounds, namely, that— (a) satisfactory evidence has not been given of the good character of the applicant, (b) satisfactory evidence has been given that the applicant, or any person responsible or proposed to be responsible for the management of the applicant's business as a pawnbroker, is not a fit and proper person to hold a licence, (c) the applicant, or any person responsible or proposed to be responsible for the management of the applicant's business as a pawnbroker, is by order of a court disqualified from obtaining a licence, (d) the applicant has failed to satisfy the Director that he is a person of financial stability, (e) the applicant is the holder of— (i) a bookmaker's licence issued under the Betting Act, 1931 , (ii) a licence for the sale of intoxicating liquor granted under the Licensing Acts, 1833 to 1994, (iii) a gaming licence issued under the Gaming and Lotteries Act, 1956 , (iv) a moneylender's licence granted under the Consumer Credit Act, 1995, or (v) an auctioneer's licence granted under the Auctioneers and House Agents Act, 1947 , (f) the applicant's premises are not suitable for the carrying on of a pawnbroker's business, or (g) the applicant or any business with which he was connected was, during the previous 5 years, convicted of a criminal offence.
\n
(4)A licence shall be valid for the period of 12 months commencing on the date specified therein and shall expire at the end of that period.
\n
(5)The Director may suspend or revoke a licence where he is satisfied that a pawnbroker has become the holder of a licence referred to in subsection (3) (e) or has failed to comply with any of the terms or conditions of the licence or a pawnbroker or any business with which he is connected has been convicted of a criminal offence.
\n
(6)Whenever the Director proposes to refuse to grant, suspend or revoke a licence he shall notify the applicant or the holder of the licence, as the case may be, of his proposal and shall, if any representations are made to him in writing by such applicant or holder within 14 days of the notification, consider the representations.
\n
(7)Whenever the Director, having considered any representations that may have been made under subsection (6), decides to refuse to grant, suspend or revoke a licence, he shall notify the applicant for, or as the case may be, the holder of, the licence of the decision and the grounds for such decision and such applicant or holder may, within 7 days of receipt of such notification, appeal against such decision to the judge of the Circuit Court within whose circuit the business to which the licence relates is to be carried on.
\n
(8)A notification referred to in subsection (6) or (7) shall be delivered personally or sent by prepaid registered post to the business address of the applicant for a licence or the holder of the licence concerned, as the case may be.
\n
(9)Where a notification under subsection (6) or (7) relates to a refusal to grant a second or subsequent licence or a suspension or revocation of a licence, the refusal, suspension or revocation shall take effect upon the expiration of the 7 days allowed for the appeal.
\n
(10)Where an appeal is made under subsection (7) by an applicant for a second or subsequent licence in respect of a refusal to grant such licence or by a holder of a licence in respect of a suspension or revocation of a licence, the refusal, suspension or revocation shall stand suspended until the appeal is determined or withdrawn and notwithstanding subsection (4) any licence held by the applicant at the time of the appeal shall continue in force until the determination or withdrawal of the appeal.
\n
(11)On the hearing of an appeal under subsection (7) in relation to a decision of the Director to refuse to grant, suspend or revoke a licence, the Circuit Court may either confirm the decision or allow the appeal and, where an appeal is allowed, the Director shall grant the licence or shall not suspend or revoke the licence, as the case may be.
\n
(12)A decision of the Circuit Court on an appeal under subsection (7) shall be final save that, by leave of that Court, an appeal from the decision shall lie to the High Court on a specified question of law.
\n
(13)In an appeal under subsection (7) the Director shall not be awarded or ordered to pay costs.
\n
Transfer of licence.
\n
9.—(1) The holder of a licence may apply to the Director to transfer the licence to another person and the Director may at his absolute discretion transfer the licence according to such terms and conditions as he sees fit subject to the person satisfying the requirements of section 8 (3).
\n
(2)An application for the transfer of a licence under subsection (1) shall be accompanied by a fee of £500 or such other amount as may stand specified in regulations made by the Minister.
\n
False information.
\n
10.—A person who in respect of an application to the Director— (a) under section 8, for the grant of a licence, or (b) under section 9 for the transfer of a licence, wilfully gives any information which is false or misleading shall be guilty of an offence.”.
\n
Amendment of Pawnbrokers Act, 1964.
\n
154.—(1) Each provision of the Pawnbrokers Act, 1964 , mentioned in column (1) of
\n
Part I
\n
of the Eighth Schedule is hereby amended to the extent specified in column (2) of that Part opposite the mention of that provision in column (1).
\n
(2)The Pawnbrokers Act, 1964 , is hereby amended— (a) by the substitution for the Second Schedule thereto of the schedule contained in
\n
Part II
\n
of the Eighth Schedule , and (b) by the substitution for the Third Schedule thereto of the schedule contained in
\n
Part III
\n
of the Eighth Schedule .
\n
Continuity of licences granted by Revenue Commissioners.
\n
155.—Any licence granted by the Revenue Commissioners under section 8 of the Pawnbrokers Act, 1964 , that is in force immediately before the commencement of this Part shall continue in force after such commencement for the remainder of the period that such licence was so granted as if it had been granted by the Director under section 8 (inserted by section 153 ) of that Act and that section shall be construed accordingly.
\n
PART XVI
\n
Amendment of Consumer Information Act, 1978 Amendment of section 9 of Consumer Information Act, 1978.
\n
156.—The Consumer Information Act, 1978 , is hereby amended by the substitution for paragraph (a) of section 9 (12) of the following paragraph: “(a) The Director shall, not more than 3 months after the end of each year, present a report to the Minister of the Director's activities in that year in relation to the performance of the Director's functions and the Minister shall cause a copy of the report to be laid before each House of the Oireachtas within 2 months of receipt of it.”.
\n
FIRST SCHEDULE Council Directive 87/102/EEC and Council Directive 90/88/EEC
\n
Section 2
\n
.
\n
Part I
\n
COUNCIL DIRECTIVE of 22 December 1986 for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit (87/102/EEC) THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular Article 100 thereof, Having regard to the proposal from the Commission(1) , Having regard to the opinion of the European Parliament(2) , Having regard to the opinion of the Economic and Social Committee(3) , Whereas wide differences exist in the laws of the Member States in the field of consumer credit;
\n
Whereas these differences of law can lead to distortions of competition between grantors of credit in the common market;
\n
Whereas these differences limit the opportunities the consumer has to obtain credit in other Member States; whereas they affect the volume and the nature of the credit sought, and also the purchase of goods and services;
\n
Whereas, as a result, these differences have an influence on the free movement of goods and services obtainable by consumers on credit and thus directly affect the functioning of the common market;
\n
Whereas, given the increasing volume of credit granted in the Community to consumers, the establishment of a common market in consumer credit would benefit alike consumers, grantors of credit, manufacturers, wholesalers and retailers of goods and providers of services;
\n
Whereas the programmes of the Europen Economic Community for a consumer protection and information policy(4) provide, inter alia, that the consumer should be protected against unfair credit terms and that a harmonization of the general conditions governing consumer credit should be undertaken as a priority;
\n
Whereas differences of law and practice result in unequal consumer protection in the field of consumer credit from one Member State to another;
\n
Whereas there has been much change in recent years in the types of credit available to and used by consumers; whereas new forms of consumer credit have emerged and continue to develop;
\n
Whereas the consumer should receive adequate information on the conditions and cost of credit and on his obligations; whereas this information should include, inter alia, the annual percentage rate of charge for credit, or, failing that, the total amount that the consumer must pay for credit; whereas, pending a decision on a Community method or methods of calculating the annual percentage rate of charge, Member States should be able to retain existing methods or practices for calculating this rate, or failing that, should establish provisions for indicating the total cost of the credit to the consumer;
\n
Whereas the terms of credit may be disadvantageous to the consumer; whereas better protection of consumers can be achieved by adopting certain requirements which are to apply to all forms of credit;
\n
Whereas, having regard to the character of certain credit agreements or types of transaction, these agreements or transactions should be partially or entirely excluded from the field of application of this Directive;
\n
Whereas it should be possible for Member States, in consultation with the Commission, to exempt from the Directive certain forms of credit of a non-commercial character granted under particular conditions;
\n
Whereas the practices existing in some Member States in respect of authentic acts drawn up before a notary or judge are such as to render the application of certain provisions of this Directive unnecessary in the case of such acts; whereas it should therefore be possible for Member States to exempt such acts from those provisions;
\n
Whereas credit agreements for very large financial amounts tend to differ from the usual consumer credit agreements; whereas the application of the provisions of this Directive to agreements for very small amounts could create unnecessary administrative burdens both for consumers and grantors of credit; whereas therefore, agreements above or below specified financial limits should be excluded from the Directive;
\n
Whereas the provision of information on the cost of credit in advertising and at the business premises of the creditor or credit broker can make it easier for the consumer to compare different offers;
\n
Whereas consumer protection is further improved if credit agreements are made in writing and contain certain minimum particulars concerning the contractual terms;
\n
Whereas, in the case of credit granted for the acquisition of goods, Member States should lay down the conditions in which goods may be repossessed, particularly if the consumer has not given his consent; whereas the account between the parties should upon repossession be made up in such manner as to ensure that the repossession does not entail any unjustified enrichment;
\n
Whereas the consumer should be allowed to discharge his obligations before the due date; whereas the consumer should then be entitled to an equitable reduction in the total cost of the credit;
\n
Whereas the assignment of the creditor's rights arising under a credit agreement should not be allowed to weaken the position of the consumer;
\n
Whereas those Member States which permit consumers to use bills of exchange, promissory notes or cheques in connection with credit agreements should ensure that the consumer is suitably protected when so using such instruments;
\n
Whereas, as regards goods or services which the consumer has contracted to acquire on credit, the consumer should, at least in the circumstances defined below, have rights vis-à-vis the grantor of credit which are in addition to his normal contractual rights against him and against the supplier of the goods or services; whereas the circumstances referred to above are those where grantor of credit and the supplier of goods or services have a pre-existing agreement whereunder credit is made available exclusively by that grantor of credit to customers of that supplier for the purpose of enabling the consumer to acquire goods or services from the latter;
\n
Whereas the ECU is as defined in Council Regulation (EEC) No 3180/78(1) , as last amended by Regulation (EEC) No 2626/84(2) ; whereas Member States should to a limited extent be at liberty to round off the amounts in national currency resulting from the conversion of amounts of this Directive expressed in ECU; whereas the amounts in this Directive should be periodically re-examined in the light of economic and monetary trends in the Community, and, if need be, revised;
\n
Whereas suitable measures should be adopted by Member States for authorising persons offering credit or offering to arrange credit agreements or for inspecting or monitoring the activities of persons granting credit or arranging for credit to be granted or for enabling consumers to complain about credit agreements or credit conditions;
\n
Whereas credit agreements should not derogate, to the detriment of the consumer, from the provisions adopted in implementation of this Directive or corresponding to its provisions; whereas those provisions should not be circumvented as a result of the way in which agreements are formulated;
\n
Whereas, since this Directive provides for a certain degree of approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit and for a certain level of consumer protection, Member States should not be prevented from retaining or adopting more stringent measures to protect the consumer, with due regard for their obligations under the Treaty;
\n
Whereas, not later than 1 January 1995, the Commission should present to the Council a report concerning the operation of this Directive, HAS ADOPTED THIS DIRECTIVE:
\n
Article 1
\n
1.This Directive applies to credit agreements.
\n
2.For the purpose of this Directive: (a) ‘consumer’ means a natural person who, in transactions covered by this Directive, is acting for purposes which can be regarded as outside his trade or profession; (b) ‘creditor’ means a natural or legal person who grants credit in the course of his trade, business or profession, or a group of such persons; (c) ‘credit agreement’ means an agreement whereby a creditor grants or promises to grant to a consumer a credit in the form of a deferred payment, a loan or other similar financial accommodation.
\n
Agreements for the provision on a continuing basis of a service or a utility, where the consumer has the right to pay for them, for the duration of their provision, by means of instalments, are not deemed to be credit agreements for the purpose of this Directive; (d) ‘total cost of the credit to the consumer’ means all the costs of the credit including interest and other charges directly connected with the credit agreement, determined in accordance with the provisions or practices existing in, or to be established by, the Member States. (e) ‘annual percentage rate of charge’ means the total cost of the credit to the consumer expressed as an annual percentage of the amount of the credit granted and calculated according to existing methods of the Member States.
\n
Article 21. This Directive shall not apply to:
\n
(a) credit agreements or agreements promising to grant credit: — intended primarily for the purpose of acquiring or retaining property rights in land or in an existing or projected building, — intended for the purpose of renovating or improving a building as such; (b) hiring agreements except where these provide that the title will pass ultimately to the hirer; (c) credit granted or made available without payment of interest or any other charge; (d) credit agreements under which no interest is charged provided the consumer agrees to repay the credit in a single payment; (e) credit in the form of advances on a current account granted by a credit institution or financial institution other than on credit card accounts.
\n
Nevertheless, the provisions of Article 6 shall apply to such credits; (f) credit agreements involving amounts less than 200 ECU or more than 20 000 ECU; (g) credit agreements under which the consumer is required to repay the credit: — either, within a period not exceeding three months, — or, by a maximum number of four payments within a period not exceeding 12 months.
\n
2.A Member State may, in consultation with the Commission, exempt from the application of this Directive certain types of credit which fulfil the following conditions: — they are granted at rates of charge below those prevailing in the market, and — they are not offered to the public generally.
\n
3.The provisions of Article 4 and of Articles 6 to 12 shall not apply to credit agreements or agreements promising to grant credit, secured by mortgage on immovable property, in so far as these are not already excluded from the Directive under paragraph 1 (a) of this Article.
\n
4.Member States may exempt from the provisions of Articles 6 to 12 credit agreements in the form of an authentic act signed before a notary or judge.
\n
Article 3
\n
Without prejudice to Council Directive 84/450/EEC of 10 September 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising(1) , and to the rules and principles applicable to unfair advertising, any advertisement, or any offer which is displayed at business premises, in which a person offers credit or offers to arrange a credit agreement and in which a rate of interest or any figures relating to the cost of the credit are indicated, shall also include a statement of the annual percentage rate of charge, by means of a representative example if no other means is practicable.
\n
Article 4
\n
1.Credit agreements shall be made in writing. The consumer shall receive a copy of the written agreement.
\n
2.The written agreement shall include: (a) a statement of the annual percentage rate of charge; (b) a statement of the conditions under which the annual percentage rate of charge may be amended.
\n
In cases where it is not possible to state the annual percentage rate of charge, the consumer shall be provided with adequate information in the written agreement. This information shall at least include the information provided for in the second indent of Article 6 (1).
\n
3.The written agreement shall further include the other essential terms of the contract.
\n
By way of illustration, the Annex to this Directive contains a list of terms which Member States may require to be included in the written agreement as being essential.
\n
Article 5
\n
By way of derogation from Articles 3 and 4 (2), and pending a decision on the introduction of a Community method or methods of calculating the annual percentage rate of charge, those Member States which, at the time of notification of this Directive, do not require the annual percentage rate of charge to be shown or which do not have an established method for its calculation, shall at least require the total cost of the credit to the consumer to be indicated.
\n
Article 6
\n
1.Notwithstanding the exclusion provided for in Article 2 (1) (e), where there is an agreement between a credit institution or financial institution and a consumer for the granting of credit in the form of an advance on a current account, other than on credit card accounts, the consumer shall be informed at the time or before the agreement is concluded: — of the credit limit, if any, — of the annual rate of interest and the charges applicable from the time the agreement is concluded and the conditions under which these may be amended, — of the procedure for terminating the agreement.
\n
This information shall be confirmed in writing.
\n
2.Furthermore, during the period of the agreement, the consumer shall be informed of any change in the annual rate of interest or in the relevant charges at the time it occurs. Such information may be given in a statement of account or in any other manner acceptable to Member States.
\n
3.In Member States where tacitly accepted overdrafts are permissible, the Member States concerned shall ensure that the consumer is informed of the annual rate of interest and the charges applicable, and of any amendment thereof, where the overdraft extends beyond a period of three months.
\n
Article 7
\n
In the case of credit granted for the acquisition of goods, Member States shall lay down the conditions under which goods may be repossessed, in particular if the consumer has not given his consent. They shall further ensure that where the creditor recovers possession of the goods the account between the parties shall be made up so as to ensure that the repossession does not entail any unjustified enrichment.
\n
Article 8
\n
The consumer shall be entitled to discharge his obligations under a credit agreement before the time fixed by the agreement. In this event, in accordance with the rules laid down by the Member States, the consumer shall be entitled to an equitable reduction in the total cost of the credit.
\n
Article 9
\n
Where the creditor's rights under a credit agreement are assigned to a third person, the consumer shall be entitled to plead against that third person any defence which was available to him against the original creditor, including set-off where the latter is permitted in the Member State concerned.
\n
Article 10The Member States which, in connection with credit agreements, permit the consumer:
\n
(a) to make payment by means of bills of exchange including promissory notes; (b) to give security by means of bills of exchange including promissory notes and cheques, shall ensure that the consumer is suitably protected when using these instruments in those ways.
\n
Article 11
\n
1.Member States shall ensure that the existence of a credit agreement shall not in any way affect the rights of the consumer against the supplier of goods or services purchased by means of such an agreement in cases where the goods or services are not supplied or are otherwise not in conformity with the contract for their supply.
\n
2.Where: (a) in order to buy goods or obtain services the consumer enters into a credit agreement with a person other than the supplier of them; and (b) the grantor of the credit and the supplier of the goods or services have a pre-existing agreement whereunder credit is made available exclusively by that grantor of credit to customers of that supplier for the acquisition of goods or services from that supplier; and (c) the consumer referred to in subparagraph (a) obtains his credit pursuant to that pre-existing agreement; and (d) the goods or services covered by the credit agreement are not supplied, or are supplied only in part, or are not in conformity with the contract for supply of them; and (e) the consumer has pursued his remedies against the supplier but has failed to obtain the satisfaction to which he is entitled, the consumer shall have the right to pursue remedies against the grantor of credit. Member States shall determine to what extent and under what conditions these remedies shall be exercisable.
\n
3.Paragraph 2 shall not apply where the individual transaction in question is for an amount less than the equivalent of 200 ECU.
\n
Article 121. Member States shall:
\n
(a) ensure that persons offering credit or offering to arrange credit agreements shall obtain official authorization to do so, either specifically or as suppliers of goods and services; or (b) ensure that persons granting credit or arranging for credit to be granted shall be subject to inspection or monitoring of their activities by an institution or official body; or (c) promote the establishment of appropriate bodies to receive complaints concerning credit agreements or credit conditions and to provide relevant information or advice to consumers regarding them.
\n
2.Member States may provide that the authorization referred to in paragraph 1 (a) shall not be required where persons offering to conclude or arrange credit agreements satisfy the definition in Article 1 of the first Council Directive of 12 December 1977 on the co-ordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions(1) and are authorized in accordance with the provisions of that Directive.
\n
Where persons granting credit or arranging for credit to be granted have been authorized both specifically, under the provisions of paragraph 1 (a) and also under the provisions of the aforementioned Directive, but the latter authorization is subsequently withdrawn, the competent authority responsible for issuing the specific authorization to grant credit under paragraph 1 (a) shall be informed and shall decide whether the person concerned may continue to grant credit, or arrange for credit to be granted, or whether the specific authorization granted under paragraph 1 (a) should be withdrawn.
\n
Article 13
\n
1.For the purposes of this Directive, the ECU shall be that defined by Regulation (EEC) No 3180/78, as amended by Regulation (EEC) No 2626/84. The equivalent in national currency shall initially be calculated at the rate obtaining on the date of adoption of this Directive.
\n
Member States may round off the amounts in national currency resulting from the conversion of the amounts in ECU provided such rounding off does not exceed 10 ECU.
\n
2.Every five years, and for the first time in 1995, the Council, acting on a proposal from the Commission, shall examine and, if need be, revise the amounts in this Directive in the light of economic and monetary trends in the Community.
\n
Article 14
\n
1.Member States shall ensure that credit agreements shall not derogate, to the detriment of the consumer, from the provisions of national law implementing or corresponding to this Directive.
\n
2.Member States shall further ensure that the provisions which they adopt in implementation of this directive are not circumvented as a result of the way in which agreements are formulated, in particular by the device of distributing the amount of credit over several agreements.
\n
Article 15
\n
This Directive shall not preclude Member States from retaining or adopting more stringent provisions to protect consumers consistent with their obligations under the Treaty.
\n
Article 16
\n
1.Member States shall bring into force the measures necessary to comply with this Directive not later than 1 January 1990 and shall forthwith inform the Commission thereof.
\n
2.Member States shall communicate to the Commission the texts of the main provisions of national law which they adopt in the field covered by this Directive.
\n
Article 17
\n
Not later than 1 January 1995 the Commission shall present a report to the Council concerning the operation of this Directive.
\n
Article 18
\n
This Directive is addressed to the Member States.
\n
Done at Brussels, 22 December, 1986.
\n
For the Council The President G. SHAW.
\n
ANNEX List of Terms Referred to in Article 4 (3) 1. Credit agreements for financing the supply of particular goods or services: (i) a description of the goods or services covered by the agreement; (ii) the cash price and the price payable under the credit agreement; (iii) the amount of the deposit, if any, the number and amount of instalments and the dates on which they fall due, or the method of ascertaining any of the same if unknown at the time the agreement is concluded; (iv) an indication that the consumer will be entitled, as provided in Article 8, to a reduction if he repays early; (v) who owns the goods (if ownership does not pass immediately to the consumer) and the terms on which the consumer becomes the owner of them; (vi) a description of the security required, if any; (vii) the cooling-off period, if any; (viii) an indication of the insurance(s) required, if any, and, when the choice of insurer is not left to the consumer, an indication of the cost thereof.
\n
2.Credit agreements operated by credit cards: (i) the amount of the credit limit, if any; (ii) the terms of repayment or the means of determining them; (iii) the cooling-off period, if any.
\n
3.Credit agreements operated by running account which are not otherwise covered by the Directive: (i) the amount of the credit limit, if any, or the method of determing it; (ii) the terms of use and repayment; (iii) the cooling-off period, if any.
\n
4.Other credit agreements covered by the Directive: (i) the amount of the credit limit, if any; (ii) an indication of the security required, if any; (iii) the terms of repayment; (iv) the cooling-off period, if any; (v) an indication that the consumer will be entitled, as provided in Article 8, to a reduction if he repays early.
\n
Part II
\n
COUNCIL DIRECTIVE of 22 February 1990 amending Directive 87/102/EEC for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit (90/88/EEC) THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular Article 100a thereof, Having regard to the proposal from the Commission(1) , In cooperation with the European Parliament(2) , Having regard to the opinion of the Economic and Social Committee(3) , Whereas Article 5 of Council Directive 87/102/EEC(4) provides for the introduction of a Community method or methods of calculating the annual percentage rate of lcharge for consumer credit;
\n
Whereas it is desirable, in order to promote the establishment and functioning the internal market and to ensure that consumers benefit from a high level of protection, that one method of calculating the said annual percentage rate of charge should be used throughout the Community;
\n
Whereas it is desirable, with a view to introducing such a method and in accordance with the definition of the total cost of credit to the consumer, to draw up a single mathematical formula for calculating the annual percentage rate of charge and for determining credit cost items to be used in the calculation by indicating those costs which must not be taken into account;
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Whereas, during a trasitional period, Member States which prior to the date of notification of this Directive, apply laws which permit the use of another mathematical formula for calculating the annual percentage rate of charge may continue to apply such laws;
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Whereas, before expiry of the transitional period and in the light of experience, the Council will, on the basis of a proposal from the Commission, take a decision which will make it possible to apply a single Community mathematical formula;
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Whereas it is desirable, whenever necessary, to adopt certain hypotheses for calculating the annual percentage rate of charge;
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Whereas by virtue of the special nature of loans guaranteed by a mortgage secured on immoveable property it is desirable that such credit should continue to be partially excluded from this Directive;
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Whereas the information which must be communicated to the consumer in the written contract should be amplified, HAS ADOPTED THIS DIRECTIVE:
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Article 1Directive 87/102/EEC is hereby amended as follows:
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1.In Article 1 (2), points (d) and (e) shall be replaced by the following: ‘(d) “total cost of the credit to the consumer” means all the costs, including interest and other charges, which the consumer has to pay for the credit.’; ‘(e) “annual percentage rate of charge” means the total cost of the credit to the consumer, expressed as an annual percentage of the amount of the credit granted and calculated in accordance with Article 1a’.
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2.The following Article shall be inserted: ‘Article 1a 1. (a) The annual percentage rate of charge, which shall be that equivalent, on an annual basis, to the present value of all commitments (loans, repayments and charges), future or existing, agreed by the creditor and the borrower, shall be calculated in accordance with the mathematical formula set out in Annex II. (b) Four examples of the method of calculation are given in Annex III, by way of illustration.
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2.For the purpose of calculating the annual percentage rate of charge, the “total cost of the credit to the consumer” as defined in Article 1 (2) (d) shall be determined, with the exception of the following charges: (i) charges payable by the borrower for non-compliance with any of his commitments laid down in the credit agreement; (ii) charges other than the purchase price which, in purchases of goods or services, the consumer is obliged to pay whether the transactions is paid in cash or by credit; (iii) charges for the transfer of funds and charges for keeping an account intended to receive payments towards the reimbursement of the credit the payment of interest and other charges except where the consumer doesn ot have reasonable freedom of choice in the matter and where such charges are abnormally high; this provision shall not, however, apply to charges for collection of such reimbursements or payments, whether made in cash or otherwise; (iv) membership subscriptions to associations or groups and arising from agreements separate from the credit agreement, even though such subscriptions have an effect on the credit terms; (v) charges for insurance or guarantees; included are, however, those designed to ensure payment to the creditor, in the event of the death, invalidity, illness or unemployment of the consumer, of a sum equal to or less than the total amount of the credit togehter with relevant interest and other charges which have to be imposed by the creditor as a condition for credit being granted.
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3.(a) Where credit transactions referred to in this Directive are subject to the provisions of national laws in force on 1 March 1990 which impose maximum limits on the annual percentage rate of charge for such transactions and, where such provisions permit standard costs other than those described in paragraph 2 (i) to (v) not to be included in those maximum limits, Member States may, solely in respect of such transactions, not include the aforementioned costs when calculating the annual percentage rate of charge, as stipulated in this Directive, provided that there is a requirement in the cases mentioned in Article 3 and in the credit agreement, that the consumer be informed of the amount and inclusion thereof in the payments to be made. (b) Member States may no longer apply point (a) from the date of entry into force of the single mathematical formula for calculating the annual percentage rate of charge in the Community, pursuant to the provisions of paragraph 5 (c).
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4.(a) The annual percentage rate of charge shall be calculated at the time the credit contract is concluded, without prejudice to the provisions of Article 3 concerning advertisements and special offers. (b) The calculation shall be made on the assumption that the credit contract is valid for the period agreed and that the creditor and the consumer fulfil their obligations under the terms and by the dates agreed.
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5.(a) As a transitional measure, notwithstanding the provisions of paragraph 1 (a), Member States which, prior to 1 March 1990, applied legal provisions whereby a mathematical formula different from that given in Annex II could be used for calculating the annual percentage rate of charge, may continue applying that formula within their territory for a period of three years starting from 1 January 1993.
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Member States shall take the appropriate measures to ensure that only one mathematical formula for calculating the annual percentage rate of charge is used within their territory. (b) Six months before the expiry of the time limit laid down in point (a) the Commission shall submit to the Council a report, accompanied by a proposal, which will make it possible in the light of experience, to apply a single Community mathematical formula for calculating the annual percentage rate of charge. (c) The Council shall, acting by a qualified majority on the basis of the proposal from the Commission, take a decision before 1 January 1996.
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6.In the case of credit contracts containing clauses allowing variations in the rate of interest and the amount or level of other charges contained in the annual percentage rate of charge but unquantifiable at the time when it is calculated, the annual percentage rate of charge shall be calculated on the assumption that interest and other charges remain fixed and will apply until the end of the credit contract.
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7.Where necessary, the following assumptions may be made in calculating the annual percentage rate of charge: —if the contract does not specify a credit limit, the amount of credit granted shall be equal to the amount fixed by the relevant Member State, without exceeding a figure equivalent to ECU 2 000; —if there is no fixed timetable for repayment, and one cannot be deduced from the terms of the agreement and the means for repaying the credit granted, the duration of the credit shall be deemed to be one year; —unless otherwise specified, where the contract provides for more than one repayment date, the credit will be made available and the repayments made at the earliest time provided for in the agreement’.
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3.Article 2 (3) shall be replaced by the following: ‘3. The provisions of Article 1a and of Articles 4 to 12 shall not apply to credit agreements or agreements promising to grant credit, secured by mortgage on immovable property, insofar as these are not already excluded from the Directive under paragraph 1 (a).’ 4. The following subparagraph shall be added to Article 4 (2): ‘(c) a statement of the amount, number and frequency or dates of the payments which the consumer must make to repay the credit, as well as of the payments for interest and other charges; the total amount of these payments should also be indicated where possible; (d) a statement of the cost items referred to in Article 1a (2) with the exception of expenditure related to the breach of contractual obligations which were not included in the calculation of the annual percentage rate of charge but which have to be paid by the consumer in given circumstances, together with a statement indentifying such circumstances. Where the exact amount of those items is known, that sum is to be indicated; if that is not the case, either a method of calculation or as accurate an estimate as possible is to be provided where possible’.
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5.Article 5 shall be deleted.
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6.The Annex shall become Annex I and the following point shall be added to paragraph 1: ‘(ix) the obligation on the consumer to save a certain amount of money which must be placed in a special account’.
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7.Annexes II and III attached hereto shall be added.
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Article 2
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1.Member States shall take the measures necessary to cumply with this Directive not later than 31 December 1992 and shall forthwith inform the Commission thereof.
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2.Member States shall communicate to the Commission the texts of the main provisions of national law which they adopt in the field governed by this Directive.
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Article 3
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This Directive is addressed to the Member States.
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Done at Brussels, 22 February 1990.
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For the Council The President D.J. O'Malley ANNEX ‘Annex II THE BASIC EQUATION EXPRESSING THE EQUIVALENCE OF LOANS ON THE ONE HAND, AND REPAYMENTS AND CHARGES ON THE OTHER:
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Meaning of letters and symbols:
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K is the number of a loan K′ is the number of a repayment or a payment of charges AK is the amount of loan number K A′K′ is the amount of repayment number K′ represents a sum m is the number of the last loan m′ is the number of the last repayment or payment of charges tK is the interval, expressed in years and fractions of a year, between the date of loan No. 1 and those of subsequent loans Nos. 2 to m tK′ is the interval expressed in years and fractions of a year between the date of loan No. 1 and those of repayments or payments of charges Nos. 1 to m′ i is the percentage rate that can be calculated (either by algebra, by successive approximations, or by a computer programme) where the other terms in the equation are known from the contract or otherwise.
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Remarks (a) The amounts paid by both parties at different times shall not necessarily be equal and shall not necessarily be paid at equal intervals. (b) The starting date shall be that of the first loan. (c) Intervals between dates used in the calculations shall be expressed in years or in fractions of a year.
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Annex III EXAMPLES OF CALCULATIONS First example Sum loaned S = ECU 1 000.
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It is repaid in a single payment of ECU 1 200 made 18 months, i.e. 1,5 years, after the date of the loan.
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The equation becomes 1000 = 1200 _______ (1 + i)1,5 or (1 + i)1,5 = 1,2 1 + i = 1,129243 i = 0,129243 This amount will be rounded down to 12,9% or 12,92% depending on whether the State or habitual practice allows the percentage to be rounded off to the first or second decimal.
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Second example The sum agreed is S = ECU 1 000 but the creditor retains ECU 50 for enquiry and administrative expenses, so that the loan is in fact ECU 950; the repayment of ECU 1 200, as in the first example, is made 18 months after the date of the loan.
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The equation becomes 950 = 1200 _______ (1 + i)1,5 or (1 + i)1,5 = 1200 ______ 950 = 1,263157 1 + i = 1,16851 ... i = 1,16851 ... rounded off to 16,9% or 16,85%.
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Third example The sum lent is ECU 1 000, repayable in two amounts each of ECU 600, paid after one and two years respectively.
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The equation becomes 1000 = 600 _________ (1 + i) + 600 _________ (1 + i)2; it is solved by algebra and produces i = 0,1306623, rounded off to 13,1% or 13,07%.
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Fourth example The sum lent is ECU 1 000 and the amounts to be paid by the borrower are:
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After three months (0,25 years) ECU 272 After six months (0,50 years) ECU 272 After twelve months (1 year) (1 year) ECU 544 _________ Total ECU 1 088 The equation becomes:
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1000 = 272 _________ (1 + i)0.25 + 272 _________ (1 + 0)0.50 + 544 ______ (1 + i) This equation allows i to be calculated by successive approximations, which can be programmed on a ocket computer.
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The result is: i = 0,1321 rounded off 13,2 or 13,21%.’ SECOND SCHEDULE Enactments Repealed
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Section 19
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.
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Session and Chapter or Year and Number Short Title Extent of Repeal
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(1)
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(2)
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(3)63 & 64 Vict. c. 51 Moneylenders Act, 1900 The whole Act 1933, No. 36 Moneylenders Act, 1933 The whole Act 1946, No. 16 Hire-Purchase Act, 1946 The whole Act 1960, No. 15 Hire-Purchase (Amendment) Act, 1960 The whole Act 1980, No. 16 Sale of Goods and Supply of Services Act, 1980
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Part III
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( sections 25 to 38 ) and section 50 1989, No. 16 Central Bank Act, 1989 Sections 28 and 136 THIRD SCHEDULE Forms of Notice to be Included in Agreements
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Section 36
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and 129 .
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Part I
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Form of Notice to be included on front page of a credit agreement.
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IMPORTANT INFORMATION 1. Amount of credit advanced : _____________________ 2. Period of Agreement : _____________________ 3. Number of Repayment Instalments : _____________________ 4. Amount of Each Instalment : _____________________ 5. Total Amount Repayable : _____________________ 6. Cost of this credit (5 minus 1) : _____________________ 7. Annual Percentage Rate of Charge : _____________________ N.B. You may withdraw from this agreement at any time within 10 days of receiving this agreement or a copy of it.
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Part II
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Form of Notice to be included on front page of a housing loan.
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IMPORTANT INFORMATION 1. Amount of credit advanced : _____________________ 2. Period of Agreement : _____________________ 3. Number of Repayment Instalments : _____________________ 4. Amount of Each Instalment* : _____________________ 5. Total Amount Repayable* : £____________________ 6. Cost of this credit* (5 minus 1) : _____________________ 7. APR** : ___________________% 8. Amount of endowment premium* (if applicable) : : £____________________ 9. Amount of mortgage protection premium* (if applicable) : : £____________________ 10. Effect on amount of instalment of 1% increase in first year in interest rate*** : _____________________ *as calculated at the time of making agreement. **annual percentage rate of charge. ***this is the amount by which the instalment repayment will change in the event of a 1% increase in the interest rate on which the above calculations are based.
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FOURTH SCHEDULE APR—Method of Calculation
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Section 9
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.
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THE BASIC EQUATION EXPRESSING THE EQUIVALENCE OF LOANS ON THE ONE HAND, AND REPAYMENTS AND CHARGES ON THE OTHER:
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Meaning of letters and symbols:
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K is the number of a loan K′ is the number of a repayment or a payment of charges AK is the amount of loan number K A′K′ is the amount of repayment number K′ represents a sum m is the number of the last loan m′ is the number of the last repayment or payment of charges tK is the interval, expressed in years and fractions of a year, between the date of loan No. 1 and those of subsequent loans Nos. 2 to m′ tK′ is the interval expressed in years and fractions of a year between the date of loan No. 1 and those of repayments or payments of charges Nos. 1 to m1 i is the percentage rate that can be calculated (either by algebra, by successive approximations, or by a computer programme) where the other terms in the equation are known from the contract or otherwise.