The Law Society is calling for solicitors’ client accounts to be exempted from a proposed new charge for so-called ‘negative interest’ from two of the country’s leading national banks.

The call comes as solicitors who are customers of AIB and Bank of Ireland were notified of the banks’ intentions to introduce a charge on all monies, including home-mortgage loans, held in solicitors’ client accounts.

Law Society President James Cahill said: “We are deeply disappointed at this latest attempt by the banks to increase profits by penalising consumers, particularly future homeowners who already face significant financial challenges.

Unjust

“The proposed new charges, so-called negative interest on monies held in solicitors’ client accounts are unjust, over-charging and contrary to public policy and consumer protection."

“The banks have wrongly included solicitors’ client accounts in their general application of negative interest rates, which they maintain apply to savings accounts. Solicitors’ client accounts are not savings accounts – they are a necessary part of commercial and conveyancing transactions. 

“Put simply, when a person is paying out their borrowed money to complete the property purchase, they will have less money than when they received the loan. A similar situation will exist for those who are selling and paying off a mortgage. As a direct result of this charge, they will need to have additional money to make up the difference,” explained Mr Cahill.

Urgent matter

“While the banks continue to claim that the new charges will not impact ordinary consumers, unfortunately, as is so often the case, it is the consumer who will quite literally pay the price. The Law Society – on behalf of consumers, clients and our members – will continue to engage with the banks to address this urgent matter.

“We are calling on AIB and Bank of Ireland to exempt solicitors’ client accounts from these new charges to reduce unnecessary financial pressures on consumers. If the banks decide to proceed as planned, every-day consumers will lose out.”