May 2022
Information on the
Credit Institution Charges
Approval Process –
Consumer Protection Directorate
Information on the Credit Institution Charges Approval Process
Central Bank of Ireland
Page 2
Contents
Introduction ................................................................................................................... 4
The Obligation to Notify the Central Bank of Charges ................................... 4
Exemptions for New Entrants .................................................................................. 5
Contravention of Section 149 ................................................................................. 5
The Cost of Making a Section 149 Notification ................................................. 6
What Firms Section 149 Applies to ....................................................................... 6
Examples of Products to which Section 149 Applies ......................................................... 6
Definition of a Charge................................................................................................. 6
Examples of Charges to which Section 149 Applies ........................................................... 6
Third Party Charges .................................................................................................... 7
Non-credit Institution to Credit Institution ......................................................................... 7
Credit Institution to Credit Institution .................................................................................. 7
Industry Letter .............................................................................................................................. 7
The Notification Process ........................................................................................... 8
1. Pre-notification Phase ........................................................................................................ 8
2. Consideration Phase ........................................................................................................... 9
3. Completion Phase ................................................................................................................ 9
Timelines ......................................................................................................................... 9
The Four Assessment Criteria ............................................................................... 11
The Central Bank’s Section 149 Process and Information Requirements
.......................................................................................................................................... 11
Peer Research/Analysis ........................................................................................................... 11
Switching Research/Analysis.................................................................................................. 12
Customer Usage Patterns ........................................................................................................ 12
Financial Information ................................................................................................................ 12
Sample Commercial Justification .......................................................................................... 14
Sample Supplemental Commercial Justification .............................................................. 15
Pricing Strategy .......................................................................................................................... 17
Letter of Direction ..................................................................................................... 18
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Other Disclosure Obligations ................................................................................................. 18
The Exemption Process ............................................................................................ 19
Contact .......................................................................................................................... 19
Section 149 Process Flow Chart ........................................................................... 20
Section 149 Notification Checklist ...................................................................... 21
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Introduction
The purpose of this document is to assist credit institutions as defined in section 2 of the
Consumer Credit Act 1995 (as amended) (the Act) when making a notification under section
149 of the Consumer Credit Act 1995 (section 149 of the Act), by providing information on the
process employed by the Central Bank of Ireland (Central Bank) when assessing these
notifications. This document builds on best practice seen by the Central Bank in the
notifications received from credit institutions to date. It also provides credit institutions with
information on the scope of section 149, together with the timelines and the process employed
by the Central Bank when considering section 149 notifications. This document also seeks to
inform credit institutions about the type of information the Central Bank requires from credit
institutions in order to consider notifications made under section 149.
This document was originally published in 2014 to explain the changes in the Central Bank’s
section 149 process following amendments made to section 149 by the Central Bank
(Supervision and Enforcement) Act 2013 and following on from the Department of Finance’s
Report of the Review of Regulation of Bank Charges in Ireland
1
. This document has now been
amended to include the updated notional activity customer profiles, used by the Central Bank
to assist in assessing section 149 notifications relating to personal current accounts, published
in August 2020. This document was further amended, following the enactment of the Consumer
Protection (Regulation of Retail Credit and Credit Servicing Firms) Act 2022 (the RCF/CSF Act),
to reflect the updated definition of credit institution
2
in section 2 the Act (as amended by the
RCF/CSF Act ).
This document does not constitute legal advice nor does it seek to interpret relevant legislation.
It does not provide guidance on any codes of conduct or legislation that may be applicable to
charges imposed by credit institutions. This document relates to the text of section 149 in place
at the time of publication of this note. Section 149 may be changed over time, so affected credit
institutions should have on-going regard to the legislation in force at the time in question and
seek legal advice on its application to them, where appropriate.
Credit institutions should feel free to contact the Central Bank at section149@centralbank.ie
in respect of any intended notification or any notification which is currently under consideration
by the Central Bank.
The Obligation to Notify the Central Bank of Charges
Under section 149, credit institutions must notify the Central Bank if they wish to introduce any
new customer charges or increase any existing customer charges in respect of certain services.
There is also a facility in section 149 for the Central Bank to grant an exemption from the
obligation to make a notification under section 149 for individually negotiated charges. It is the
responsibility of each credit institution to determine whether a charge is to be notified to the
1
The Report can be accessed at
http://www.finance.gov.ie/sites/default/files/Review%20of%20the%20Regulation%2
0of%20Bank%20Charges%20in%20Ireland%20v8.pdf.
2
The updated definition of a credit institution in section 2 of the Act (as amended by the
RCs/CSFs Act) includes a retail credit firm authorised under the Act of 1997.
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Central Bank under section 149. If, having sought the necessary legal advice a credit institution
determines notification is required, a notification (or in an appropriate case, an application for
an exemption) must be submitted to the Central Bank.
It should be noted that section 149 applies to relevant charges to all customers, not just retail
consumers. Therefore, as well as personal consumer charges it also applies to charges to
business customers such as large corporate customers and SMEs.
Exemptions for New Entrants
Following the Central Bank (Supervision and Enforcement) Act 2013 relevant new credit
institutions establishing business in the State after 1 August 2013 are not subject to section 149
(1) and are not required to notify the Central Bank of charges imposed for their services for a
period of 3 years after the credit institution commences business in the State.
A ‘relevant new credit institution’ is a credit institution which commences business in the State
after 1 August 2013
3
. It does not refer to a credit institution which, at the time it commences
business in the State, is a related undertaking
4
of another credit institution carrying on business
as a credit institution in the State.
Before the end of the 3 year exemption period, a credit institution must notify the Central Bank
of all the charges imposed during that period and of any charges which it plans to impose or
increase after the 3 year exemption period. This notification should be submitted in sufficient
time such that the Central Bank may fully consider and issue a decision on the notification
immediately after the end of the 3 year exemption period. This notification will be considered to
be a notification made under subsection 1 of section 149 and will be subject to the statutory
timelines as set out in section 149 (and described below). A relevant new credit institution may
continue to impose these charges while the Central Bank is considering its notification.
However, if on foot of the notification, the Central Bank issues a direction to refrain from
imposing the charge (or from imposing it at a given level or in a specified circumstance) or to
publish information on the charge, the credit institution must comply with this direction.
Contravention of Section 149
Under section 12 of the Act, it is an offence for a person to impose a charge that has not been
previously notified to the Central Bank as required by section 149 (1) of the Act.
Also, the Central Bank has the power to administer sanctions in relation to a contravention of
section 149 under Part IIIC of the Central Bank Act 1942. This can include fines and other
penalties.
3
The Central Bank (Supervision and Enforcement) Act 2013 came into operation on 1
August 2013.
4
“Related undertaking" is defined in Section 3 of the Central Bank (Supervision and
Enforcement) Act 2013 and includes (amongst other undertakings), where a person is
a company, another company that is related within the meaning of section 140 (5) of
the Companies Act 1990.
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The Cost of Making a Section 149 Notification
The Central Bank may request that a notification made under section 149 be accompanied by a
fee, up to a maximum amount of €31,750. This fee is generally not imposed by the Central Bank
except in circumstances where the notification contains a large number of charges or is very
complex in nature. A fee may be imposed for Section 149 notifications and should a fee be
imposed at any stage by the Central Bank, this will be communicated to the credit institution at
the earliest opportunity during the Consideration Phase. Further information on the
Consideration Phase is contained below in The Notification Process.
What Firms Section 149 Applies to
(a) Credit Institutions as defined in the Act and authorised in Ireland; and
(b) European Credit Institutions authorised in another Member State of the European
Economic Area (EEA) and operating in the State either on a branch or a cross-border
basis.
For the purposes of this document, the term credit institution refers to all regulated entities
listed in (a) and (b) above. See below concerning exemptions for new entrants.
Examples of Products to which Section 149 Applies
Credit cards;
Credit/Loan accounts (including mortgage accounts);
Personal current accounts;
Business current accounts;
Commercial products such as letters of credit, guarantees etc.;
Foreign exchange products.
Definition of a Charge
A ‘charge’ includes a penalty or surcharge interest by whichever name called, being an interest
charge imposed in respect of arrears on a credit agreement or a loan. However, it does not
include any rate of interest or any charge, cost or expense levied by a party other than a credit
institution in connection with the provision of a service to the credit institution or the customer
and that is to be discharged by the customer (see Third Party Charges below).
Examples of Charges to which Section 149 Applies
Current account, term loan, overdraft or credit card charges;
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Mortgage charges
5
;
Foreign exchange margins and spreads;
Merchant service charges, e.g. charges imposed on retailers for the acceptance and
processing of credit/debit cards; and
Hire purchase charges.
Third Party Charges
Non-credit Institution to Credit Institution
If a charge is imposed on a credit institution by a non-credit institution and this charge is passed
on to the customer in an unaltered way, this charge is not notifiable to the Central Bank by the
credit institution.
However, the credit institution must satisfy itself that it does not generate any income from the
provision of the particular service in order for the charge to be exempted from notification as a
‘third-party pass on charge’. If the credit institution in question receives any income from the
charge then the full charge is notifiable to the Central Bank under section 149.
Credit Institution to Credit Institution
If a charge for a service (e.g. cash advance fee) is imposed by one credit institution (A) on another
(B) and this charge is in turn passed on to the customer, the charge would be required to be
notified by institution (A) as institution (A) is imposing the charge and institution (B) is simply
passing on the charge.
However credit institution (B) must satisfy itself that it does not generate any income from the
charge for the provision of the particular service in order for the charge to be exempted from
notification by credit institution (B) as a ‘third-party pass on charge’. If credit institution (B)
receives any income from the charge then the charge is notifiable by credit institution (B) to the
Central Bank under section 149.
Industry Letter
Credit institutions should pay particular attention to the industry letter issued by the Central
Bank on 23 October 2019
6
in relation to charging of costs associated with the legal process
including third party costs (the costs) to borrowers in mortgage arrears and charging of interest
on the costs.
5
Mortgage arrears charges e.g. letter issue fee, surcharge interest etc. for customers
who are in the Mortgage Arrears Resolution Process have been prohibited since 1
January 2011 in conjunction with the Code of Conduct on Mortgage Arrears.
6
https://www.centralbank.ie/regulation/consumer-protection/consumer-protection-
codes-regulations#charging-of-costs
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The Notification Process
Each notification received by the Central Bank is assessed according to the criteria set out in
section 149. The Central Bank may request additional information or clarification in respect of
a notification.
A notification is not deemed to be a complete notification made to the Central Bank under
section 149 until the Central Bank is satisfied that sufficient information has been received from
the credit institution in order for the Central Bank to commence considering that notification
under the criteria set out in section 149. Once a complete notification has been received, the
Central Bank will notify the credit institution to this effect.
This document provides general guidance on the information to be submitted, however, credit
institutions may also contact the Central Bank if they have any queries in advance of submitting
a notification.
The notification process itself can be broken down into three distinct phases:
Pre-notification Phase;
Consideration Phase; and
Completion Phase.
Information on the regulatory timelines (referred to as “the clock” in this document) is contained
below in the ‘Timelines’ section and in the ‘Section 149 Notification Process Flow Chart’.
1. Pre-notification Phase
During this phase a credit institution prepares a notification to the Central Bank. At this stage
the credit institution should:
a) seek legal advice on the application of section 149 to the proposed charge(s)
b) refer to this process information document;
c) gather the information relevant to its notification;
d) contact the Section 149 team in the Central Bank for further information on the process,
if required;
e) complete the checklist attached to this information note; and
f) submit a notification to the Central Bank in electronic format only.
The Central Bank will conduct a preliminary assessment of the completeness of the notification
as quickly as possible upon receipt, and in any event within 2 weeks. If it is not considered that a
complete notification has been made, this will be communicated to the credit institution in
writing, stating the further information required by the Central Bank to be provided by the
credit institution for the performance of the Central Bank’s functions. No further consideration
will be given to the notification until the credit institution submits all of the further information
sought, at which point the process will begin again.
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2. Consideration Phase
This phase commences once the Central Bank has received sufficient information to commence
its consideration of a notification. This means that the Central Bank is satisfied that it has
received a complete notification and has sufficient information to commence its consideration
of the substance of the notification by reference to the criteria in section 149 (see below).
However, in the course of such consideration the Central Bank may identify that further
information is required to be provided by the credit institution for the performance of the
Central Bank’s functions under section 149, in which case such information will be sought in
writing and the statutory 3 month time period (see timelines below) will stop pending receipt of
all this information. During this phase the Central Bank may also challenge the assumptions
provided by the credit institution as part of its notification and request that further clarifying or
corroborative information be provided.
During this phase therefore the Central Bank will:
a) communicate with the credit institution that a full notification has now been received;
b) carry out analysis of the notification under the criteria in section 149; and
c) revert to the credit institution seeking further information or clarification of information
received, if required.
During this phase the credit institution should reply to any requests from the Central Bank in
relation to the notification.
3. Completion Phase
Once the Central Bank has completed its assessment of the notification against the criteria in
section 149, the Central Bank will direct the credit institution to refrain from imposing a new
charge or changing an existing charge above a certain limit (which may be lower than that
requested by the credit institution in its notification) in relation to the provision of a service to
a customer or group of customers. This letter may also direct the credit institution to publish, in
such manner as may be specified by the Central Bank from time to time, information on any
charge in relation to the provision of a service to a customer or group of customers.
A diagram of the process is available below under Section 149 Process Flow Chart.
Queries may be sent to the Central Bank at section149@centralbank.ie.
Timelines
The Central Bank (Supervision and Enforcement) Act 2013, made changes to the regulatory
timelines applying to new charge notifications and increasing charge notifications. The timeline
for the Central Bank to decide upon notifications for both new and increasing charges is now 3
months. This means that the Central Bank may, within 3 months of receipt of a complete
notification under section 149, direct a credit institution 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. There
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is no statutory timeline set out for exemptions to be considered by the Central Bank, but the
Central Bank will make every effort to consider exemptions within a reasonable timeframe.
Under section 149 (6A), in calculating the periods of 3 months specified in subsections (5) and
(6), no account shall be taken of any day on which any information required by the Central Bank
to be provided by the credit institution for the performance of the Central Bank’s functions
under section 149 has not yet been so provided. In other words, the 3 month ‘clock’ will stop
running where the Central Bank seeks further information from the credit institution and will
not start running again until all the required information has been received by the Central Bank
(which will be confirmed in writing by the Central Bank).
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The Four Assessment Criteria
Each notification received by the Central Bank is assessed according to the criteria set out in
section 149, and the contents of that particular notification. The criteria set out in section 149
are:
(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 149(2)(b) of the Act;
and
(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.
The Central Bank’s Section 149 Process and Information
Requirements
The Central Bank recognises that section 149 covers a number of different charges across a
range of services, so no two notifications will contain the same research/analysis and
information. This information note seeks to cover most types of notifications, however if the
information is not appropriate to a particular notification or is not available, the credit
institution should state this in its notification, giving reasons where relevant. Similarly, if
relevant information or analysis is available to a credit institution and not referred to in this
document, it should be submitted to the Central Bank as part of the notification.
Peer Research/Analysis
Where appropriate, the Central Bank conducts a peer analysis of similar charges in the Irish
market. This is a review of the current charges imposed by credit institutions for similar
products in the market. In addition to this peer analysis, the Central Bank also carries out a
review of the effect on customers of the proposed new charges or charge increases, in order to
assist in its consideration of a notification. This is a review of the proposed charge increases
against available customer profiles as well as a review of the number and type of customers
affected by the notification.
A credit institution should provide the Central Bank with any research/analysis it has
undertaken on the service provided by market competitors. This may take the form of
research/analysis of charges imposed by other credit institutions for a similar service.
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Switching Research/Analysis
The Central Bank welcomes competition and customer choice in financial services. A customer’s
ability to switch financial services provider for the provision of a particular service will therefore
be taken into account by the Central Bank in its consideration of a notification under the criteria
in section 149. To this end, any analysis or information the credit institution may have on the
ability and incentives for customers to switch financial services provider for a particular product
should be included in a section 149 notification to the Central Bank.
Customer Usage Patterns
It is recommended that credit institutions include, as part of their notification, analysis or
research that they have carried out on the effect of charge changes on their customers and
groups of customers. Where appropriate, this analysis or research should include:
customer profiles, showing typical usage patterns and the effect of the price changes on
customers. This analysis should show the effect of the proposed charge on customers
under current usage patterns and any anticipated changes to those patterns, given the
behavioural assumptions contained in the notification;
the effect of new charges or changes to existing charges on customers who may be at
risk of being financially excluded; and
customer profiles showing the effect of any charge changes on different groups of
customers.
Financial Information
In its assessment of proposed new charges and charge increases; the Central Bank considers the
commercial justification of the new charges or charge increases submitted by the credit
institution in its notification, which should include:
historic and forecasted profit and loss data;
projected changes in customer behaviour and how this may impact charges in the
future. For example, if a current account notification is proposing to use pricing to
alter customer behaviour, the assumptions underlying this strategy should be
clearly explained in the commercial justification provided by the credit institution;
the cost of providing a product as well as the income earned and any other impact
the changes will have on overall profit, in order to understand the commercial
justification. The Central Bank also looks at the impact the notification will have on
overall profit in order to fully understand the commercial justification. Therefore,
the commercial justification should include all income from the product. For
example, a notification relating to current account charges should include all
projected costs, including overheads, and all projected income, including income
from all the charges associated with the product as well as income from the credit
institution having the use of the funds deposited with it; and
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any other pertinent financial information e.g. data relating to differential or
absolute price changes in line with the credit institution’s pricing strategy.
The tables below illustrate a sample commercial justification as well as supplemental
commercial justification for notifications relating to products which provide multiple services,
such as current accounts. These tables are for illustration purposes only and do not provide a
full list of income and costs. A credit institution should provide all information deemed
necessary for the consideration of a particular notification.
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Sample Commercial Justification
Product Name
XXXXXX
Launch of Product to
end of first calendar
year
Second calendar year
Third calendar year
Expected no. of customers:
X
X
X
Expected no. of instances incurred by
customer
X
X
X
Expected income from product (other than
from charges):
1
All other income streams (Please specify):
Examples:
Funds Based Income
Card Interchange
€X
€X
€X
€X
€X
€X
€X
€X
€X
Expected unit income from service (other
than from charges)
€X
€X
€X
Expected income from product per charges:
1
X Charge (value of proposed charge * no of
instances incurred by customer)
Y Charge (value of proposed charge * no of
instances incurred by customer)
€X
€X
€X
€X
€X
€X
Expected fixed costs
(To provide service):
Staff
IT
Etc.
€X
€X
€X
€X
€X
€X
€X
€X
€X
Expected variable costs
(To provide service):
ATM refills
Fraud
Etc.
€X
€X
€X
€X
€X
€X
€X
€X
€X
Expected Total Income from Product:
€X
€X
€X
Expected total Costs
(To provide product):
Staff
IT
Etc.
€X
€X
€X
€X
€X
€X
€X
€X
€X
Expected Total Cost from Product:
€X
€X
€X
Total expected Profit/Loss
€X
€X
€X
1. Alternatively, details of the forecasted Average Margin Earned for this product may be provided.
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If the service to which the proposed charges would apply relates to a product with which
different types of transactions can be made, for example personal and business current
accounts, the following information should be provided to the Central Bank in addition to the
information contained in the table above. The purpose of seeking the information in the table
below is to assist the Central Bank in analysing the unit cost and income for providing each
service within a product.
Sample Supplemental Commercial Justification
Product Name
xxxxx
Launch of Product to
end of first calendar
year
Second calendar year
Third calendar year
Expected unit income from service (other
than from charges)
€X
€X
€X
Expected fixed costs
(to provide service):
Staff
IT
Etc.
€X
€X
€X
€X
€X
€X
€X
€X
€X
Expected variable costs
(to provide service):
ATM refills
Fraud
Etc.
€X
€X
€X
€X
€X
€X
€X
€X
€X
Expected unit costs
(to provide service)
Fixed
Variable
Total
€X
€X
€X
€X
€X
€X
€X
€X
€X
Total expected unit Profit/Loss
The Central Bank will consider the costs provided by the credit institution as well as the effect
on customers in terms of the service provided and the charges involved. All relevant information
should be submitted and should include an overview of the service to be provided and the
justification of the cost involved.
Relevant information may include costs incurred by the credit institution when providing a
particular service or any other costs it may be seeking to pass on to customers.
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As part of any notification made under Section 149 to the Central Bank, the credit institution
should address at least the following questions:
1
How many customers does this proposal affect? What percentage of the product’s
total number of customers does this number represent?
2
What type(s) of customers would this proposal affect? For example, large corporates,
SMEs, personal customers etc.? Will the proposal affect some customer segments
more than others? If so, what are these effects?
3
What are the projected changes in customer usage patterns resulting from the
proposed charge increases/new charges, should approval be granted? Information
such as customer profiles illustrating changes to customer patterns/behaviours
forecasted for different segments as a result of the notification should also be
included, including any projected savings to the credit institution resulting from
these changing customer behaviours.
5
What customer segmentation/differentiation information is available?
6
What impact, if any, will this notification have on customers at risk of financial
exclusion?
7
What research/analysis has the credit institution carried out on the ability of
customers to switch provider/choose an alternative service?
The Central Bank may, as part of the assessment of the effect on customers of proposed new
charges or increased charges on personal current accounts, make use of customer profiles
(which were originally contained in a research paper entitled A Review of Personal Current
Account Charges - this paper is available here). These customer profiles were updated in August
2020 and are available here. These profiles may be updated from time to time.
Should a credit institution wish to submit a notification proposing charges designed to
incentivise particular customer behaviour, it should be clearly demonstrated that this is to be
done fairly and that costs are being passed on to customers in an equitable manner. This will
include the extent to which a customer can avoid or limit the charge by changing his/her own
behaviour or usage of a service. It will also include consideration of the reasonableness of
customers changing their behaviour or usage in this manner, including having regard to the
service they have contracted to receive from their credit institution and behavioural norms as
to service usage and cost.
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Pricing Strategy
It is the responsibility of each credit institution to justify any new charges or charge increases
under the criteria set out in section 149 and the Central Bank must assess the notification under
those criteria. However, it is of assistance to the Central Bank in this regard to understand in as
much detail as possible where the charge notification sits within the overall strategy of the
credit institution, including when and how the credit institution proposes to impose charges
under the approved limit. A credit institution may therefore reference relevant initiatives, for
example the National Payments Plan
7
, or any other strategy or plan as part of its notification of
charges and we encourage credit institutions to do so where it would provide the Central Bank
with a better understanding of the issues arising under the statutory criteria in section 149.
It will be for each credit institution to explain its strategy in its own words of course. However,
the following information will be relevant to the Central Bank’s considerations:
if a credit institution proposes to use pricing affected by the notification to incentivise
customers to favour automated transactions rather than paper-based transactions, the
credit institution should provide analysis or research of the effect of the proposed
changes on customers and groups of customers, particularly customers at risk of being
financially excluded;
customer profiles showing the effect of any proposed charge changes on different
groups of customers;
the behavioural assumptions underlying the strategy and the justification for these
assumptions; and
any reduction in costs/savings to be made by the credit institution over time, as a result
of the notification.
7
The National Payments Plan, which was launched in April 2013, aims to make savings
of €1bn annually to the Irish economy by increasing the use of electronic forms of
payment such as debit cards and electronic banking. Further information on the National
Payments Plan is available here.
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Letter of Direction
On completing its consideration of a notification, the Central Bank will issue a “Letter of
Direction” to the credit institution within the timeframe set down in section 149. The letter will
direct a credit institution 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 prior approval of the
Central Bank; and/or
publish, in such manner as may be specified by the Central Bank 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.
The Letter of Direction sets out the maximum approved charges that may be imposed by a credit
institution. In this Letter of Direction therefore, the Central Bank approves maximum charges
and credit institutions are free to impose a charge at any level up to this maximum. They are also
free to waive charges at their discretion.
The Letter of Direction may also require the credit institution to publish the charges at the level
to be imposed (e.g. on notices, leaflets, promotional material and/or on the institution’s website).
A direction under section 149 pertains only to the subject of Central Bank approval under
section 149 and should not be taken to constitute approval by the Central Bank of any matter
or for any purpose outside of section 149.
Other Disclosure Obligations
Each credit institution is required to comply with the terms as set out in the Letter of Direction
issued by the Central Bank, the requirements of the Consumer Protection Code and the
Payment Service Regulations with regard to the disclosure of approved charges, as well as all
other requirements of Irish financial services legislation and other applicable laws.
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The Exemption Process
A credit institution can request an exemption if it wishes to be exempt from the requirement to
notify specific charges that are individually negotiated bona fide with the credit institution by a
customer, or by or on behalf of a group of customers. An application for an exemption should
include confirmation that:
(a) the charge has been individually negotiated bona fide;
(b) the negotiations and outcome of the negotiations are documented by the credit
institution and a written record of these negotiations will be maintained for inspection,
if required, by the Central Bank; and
(c) the charge(s) do not appear on any of the credit institution’s standard tariff documents.
Exemptions are approved or rejected by a Letter of Exemption issued, by the Central Bank to
the credit institution under section 149 (11) of the Act.
Contact
This document provides general information on the process employed by the Central Bank
when considering notifications made under section 149. Should you have any questions or
queries in relation to the content of this document or in relation to a particular section 149
notification, please feel free to contact the Central Bank at section149@centralbank.ie.
Information on the Bank Charges Approval Process
Central Bank of Ireland
Page 20
Section 149 Process Flow Chart
CENTRAL BANK CREDIT INSTITUTION
COMPLETION PHASECONSIDERATION PHASEPRE-NOTIFICATION PHASE
NEW CHARGES OR
INCREASE TO
EXISTING CHARGES
DOES CHARGE
NEED TO BE
NOTIFIED UNDER
SECTION 149
REVIEW
INFORMATION
ON CENTRAL
BANK WEBSITE.
CONTACT
SECTION 149
TEAM IF
REQUIRED.
COMPILE
INFORMATION
FOR SECTION
149
NOTIFICATION
YES
RECEIVE AND
ACKNOWLEDGE
NOTIFICATION
INITIAL REVIEW OF
NOTIFICATION
FURTHER
INFORMATION OR
CLARIFICATION
REQUIRED?
FINAL REVIEW
CHARGES
APPROVED,
PARTIALLY
APPROVED OR
REJECTED?
LETTER OF
DIRECTION
SENT TO CREDIT INSTITUTION
NO SECTION 149
NOTIFICATION
REQUIRED.
COMPILE
REQUESTED
INFORMATION
AND RESPONSE TO
QUERIES
FURTHER REVIEW
OF NOTIFICATION
COMPLETE
NOTIFICATION?
REQUEST INFORMATION
NO
NOT A
COMPLETE
NOTIFICATION
NO
ACK’MENT TO
CREDIT
INSITUTION
18/08/28
Clock stops
SUBMIT TO
CENTRAL BANK
PROVIDE ALL
INFORMATION/
CLARIFICATION
REQUESTED BY
CENTRAL BANK
12/05/14 - 19/05/14
Timeline
12/05/14
3 Months
Yes
No
LETTER OF
DIRECTION
SEND QUERIES TO
FIRM
YES
18/08/28
Clock restarts
12/05/14
Day 1
Information on the Bank Charges Approval Process
Central Bank of Ireland
Page 21
Section 149 Notification Checklist
If the answer to any of the questions contained in this checklist is ’No’ or ‘Not Required’ the
reason why certain information is not included in the notification made to the Central Bank
should be included in the comments box.
Section 149 Notification Checklist
Checklist Items
Yes
No
Not
Required
Comments
Has the overall rationale behind the
notification and how the proposed
charge(s) fit with current strategy
been included in the notification?
Have details on the effect on
customers, including any research
that may have been carried out by
the credit institution, been
included?
Have Central Bank customer
profiles (available here) been
included in the submission?
Have the credit institution’s own
customer profiles been included in
the notification?
Have all assumptions underlying
any perceived or intended changes
to customer behaviours which are
expected been included in the
notification?
Have any projected long-term
savings to the credit institution,
which may be driven by changes in
customer behaviours, been included
in the notification?
Has detailed information around
affected customers’ ability to switch
to an alternative financial services
provider for a particular service or
an alternative corresponding
service, been included in the
notification?
Information on the Bank Charges Approval Process
Central Bank of Ireland
Page 25
Has the effect on customers at risk
of being financially excluded been
assessed? Have the results of this
assessment been included in the
notification?
Has a full statement of commercial
justification (including any
supplemental commercial
justification) been provided?
Has all information relevant to the
notification been included in the
notification?
Does the notification include an
overview of the service to be
provided and the justification of the
costs incurred by the credit
institution when providing a
particular service or any other costs it
may be seeking to pass on to
customers?
Has fair competition
research/analysis undertaken by the
credit institution been included in
the notification?
Note: This may take the form of an
analysis of fees imposed by other
credit institutions for a similar
service.
Has this checklist been completed
and included in the
notification?
End of Information Note.
