Whilst speaking in Parliament on Monday during a debate to transpose the EU’s Credit Mortgage Directive into the Consumer Affairs Act, Education and Employment Minister Evarist Bartolo once again hit out at MFSA Chairman Joe Bannister and insisted that it was time for him to ‘move on’.
The Bill’s objective is to amend the Consumers Affairs Act, Cap 378 to comply with the EU Parliament and Council Directives as is stated in the ‘Objects and reasons’ .
At present the ‘credit arrangements’ for consumers relating to residential immovable property’ is mainly but not exclusively dominated by the commercial banks / credit institutions. Up till now their conduct and audit of these activities fell mainly under the general Banking Supervision provisions undertaken by the MFSA.
Malta, unlike countries such as the UK does not have ‘building societies’, whose specific business is mortgage lending. This proposed amendment Bill to the Consumers Affairs Act seems to be addressing this area more specifically in line to EU Directives on this Financial services activity.
Bartolo said that although It is good that Malta continues to beef up its legislation to conform with other EU Countries and the EU Parliament and Council Directives. The amendments no doubt continue to strengthen the rights of the consumer and to ‘protect the consumer’ as is stated under clause 3 (a) of the Bill.
Although at present Malta’s Consumer Affairs Act already has many provisions to protect the consumer. Clause 3 (c) of the Bill gives the MFSA powers ‘’ to enable the MFSA to impose any application annual and other, fees payable in respect of and to levy charges in respect of any request as well as fees and charges in respect of regulatory regimes etc.
Bartolo said that it is all very well and good as these fees continue to augment the revenues of the MFSA, but the rights and protection of the consumers – in particular to matters relating to savings / and other financial services , provided mostly to retail clients – those of lowest income , are not safeguarded by elaborated and well versed directives but by prompt and effective action when required by the regulator or the competent authority under whose supervision the rights of the consumers have been assigned by law to see that these are properly executed.
“Unfortunately over the past many years we have been witness to the fact that the consumer in particular in the area of financial services was not adequately protected by the competent authority in this case the MFSA when complaints came out in the public from clients of firms who were aggrieved and found no shoulder in the regulator. Amongst these, one may list the debacles in the BOV Multi Property Investment Fund , ALLinvest , MFSP , Nemea Bank etc and over which absolutely no action was taken by the MFSA to protect consumers”.
Minister Bartolo insisted that the fees which the MFSA will be levying as is being contemplated in this Bill should go towards ensure that mortgage service providers act fairly and not abuse their clients – the consumer who surely cannot afford to be treated unfairly.
“The MFSA should be there to monitor and act to prevent rather than try to remedy cases of aggrieved consumers. Until now many still think that in this area the MFSA has not satisfactorily fulfilled its legal obligation, rather than on multi-million consultancy fees, unjustified travel and entertainment, gigantic office premises , and donations – for good and not so good causes”, Bartolo added in a not so veiled reference to the current goings on at the MFSA under Joe Bannister’s fief.