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15 March 2024

Consumer Protection Code Reform: Central Bank Launches 3-Month Consultation

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Arthur Cox

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Arthur Cox is one of Ireland’s leading law firms. For almost 100 years, we have been at the forefront of developments in the legal profession in Ireland. Our practice encompasses all aspects of corporate and business law. The firm has offices in Dublin, Belfast, London, New York and Silicon Valley.
Published on 7 March 2024, the Central Bank's Consultation Paper CP158 on its planned reforms to the Consumer Protection Code (CPC) is open for feedback until 7 June 2024.
Ireland Finance and Banking
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Published on 7 March 2024, the Central Bank's Consultation Paper CP158 on its planned reforms to the Consumer Protection Code (CPC) is open for feedback until 7 June 2024.

As expected, the revised CPC will take the form of 'Conduct of Business Regulations'. These will not only include the updated CPC provisions – they will also consolidate the Code of Conduct on Mortgage Arrears (CCMA), the Regulations on High-Cost Credit Providers, and the 2022 Insurance Regulations in one place.

CP158 was keenly awaited from the perspective of the new Individual Accountability Framework (IAF), as it includes the proposed business standards. The proposed standards (which build on the existing CPC's General Principles) are set out in a separate set of draft 'Business Standards Regulations' and contain both broad 'Standards for Business' together with more granular 'Supporting Standards for Business'. We will be covering these in more detail in a related update from our IAF/SEAR group.

CP158 (95 pages), and the draft 'Conduct of Business Regulations' (241 pages) are being analysed in detail (and we will publish a comprehensive briefing in the coming days). In the meantime, headline points for clients to be aware of are:

  • Timing: Once the consultation period ends, the final regulations are expected in early 2025. There will be a 12-month transition period, meaning that the new framework is likely to apply in full from early 2026.
  • Threshold: The Central Bank plans to increase the turnover threshold for in-scope small corporates from €3m to €5m.
  • Key Themes: Key changes / enhancements are in the areas of digitalisation, informing effectively, mortgage credit and switching, unregulated activities, fraud and scams, vulnerability, and climate risk.
  • Arrears Management: A number of changes are being proposed to the CCMA, and these will be covered in a separate arrears-focused briefing. One of the proposed changes would introduce a requirement that firms consider an appropriate and sustainable range of alternative repayment arrangements which are broad enough to meet the needs of impacted borrowers. The Central Bank plans to issue updated guidance on what it means by "appropriate and sustainable". The existing arrears management provisions of the CPC, which apply to consumers' arrears that are not covered by the CCMA (i.e. are not PDH-related) will be subject to more minor changes (these will impact policies and procedures, and will be covered in the separate arrears-focused briefing).
  • Guidance: Draft Guidance on Securing Customers' Interests and draft Guidance on Protecting Consumers in Vulnerable Circumstances were also published. Additional guidance is planned, including a 'Consumers' Guide' to the revised framework.
  • Future Plans: As previously signposted by the Central Bank, a further round of changes is expected to take account of developments that will post-date the launch of the new framework. Those changes will address matters arising from the proposed Access to Cash legislation, the upcoming National Payments Strategy, the EU's Retail Investment Strategy, and evolution of EU payment services framework. The SME Regulations are likely to be consolidated into the new framework at a later date. The Central Bank will also explore the possibility of applying the new framework in full to credit unions in the future.

Look out for more detailed analysis from us on CP158 in the coming days, together with the related insights on the IAF/SEAR, and arrears-management, aspects of the proposals.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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