Government 'powerless' to stop BoI rate rise, says Taoiseach

Government 'powerless' to stop BoI rate rise, says Taoiseach

The Government is powerless to prevent Bank of Ireland from hiking interest rates on credit cards, Taoiseach Enda Kenny has said.

Mr Kenny criticised the decision to increase rates on all cards by up to 4% a week before Christmas.

But he said it was a commercial decision and, while the Government has a 15% stake in the bank, it has no say when it comes to setting rates.

“This is not a case of where the Government regulate the interest rates that are applicable to credit cards,” Mr Kenny said.

“I don’t like this situation where the announcement is made by the bank applicable three or four days before Christmas, but this is a commercial entity and they have made this choice.”

The bank announced an interest increase on all credit cards of between 0.7% and 4%. Customers will be hit with the hike when they get their bills in January.

The changes will see fees on the bank’s Classic credit rise from 17.9% to 19.9%.

Mr Kenny said that while the Government cannot dictate to the bank, it has offered the regulator in the Central Bank of Ireland more powers if he believes it appropriate.

“It’s not a case of saying the Government won’t do anything,” Mr Kenny said.

“It’s a case of saying if the regulator requires further facilities, the Government will respond to that.”

Bank of Ireland announced plans to raise its fees in October, claiming it had to do so to ensure competitiveness in the market and to remain financially viable.

However, Sinn Féin President Gerry Adams accused the bank of cashing in and taking advantage of an already hard-pressed public.

He appealed to Mr Kenny to do something about the unfair fee hike, suggesting he speak to the public interest directors who sit on the board of the bank.

Mr Adams accused the Taoiseach of wringing his hands and refusing to tackle the issue.

He said struggling families had enough worries following the €3.5bn in spending cuts and tax hikes announced in the budget earlier this month – including a new property tax due to take effect from July.

“The banks have been bailed out to the tune of €64bn - €20bn of that under Fine Gael and Labour’s watch,” said Mr Adams.

“Despite this there is one rule for the banks and another for everyone else. This is Bank of Ireland’s Christmas present to its customers just as the family home tax is the Government’s.”

More in this Section

Cabinet told Brexit will have adverse impact on citizens and businessesCabinet told Brexit will have adverse impact on citizens and businesses

Ireland remains on high alert for possible Coronavirus cases, Cabinet toldIreland remains on high alert for possible Coronavirus cases, Cabinet told

Report lashes lack of climate actionReport lashes lack of climate action

Two Irish treated for coronavirus in Japanese hospitalTwo Irish treated for coronavirus in Japanese hospital


Des O'Sullivan takes a look at Bill Wyman's Rolling Stones memorabiliaRolling Stones memorabilia going under the hammer

All ages can suffer from spots across their back but thankfully, there are many things we can do about them, says Jennifer RockThe Skin Nerd: back to basics to treat the pesky plague of ‘bacne’

Roz Crowley tests eight coffees ahead of Fairtrade FortnightEight of the best fairtrade coffees to try

Steel Panther give metal fans the chance to let their hair down and laugh at themselves, and the Cork audience is in party mood.Live review: Steel Panther at Cyprus Avenue

More From The Irish Examiner