The Consumers' Association of Ireland (CAI) has reacted positively to new structures overhauling the regulation of the financial services industry.
The CAI said there was now an opportunity to create a new culture within the financial services industry.
CAI finance spokesman Mr Eddie Hobbs said the new entity, the Irish Financial Services Regulatory Authority (IFSRA), could create its own policy regarding consumer protection and prudential regulation.
"The IFSRA will be able to tell institutions they will have their licences threatened if they don't behave properly in the consumer area," he said.
Mr Hobbs said the new statutory ombudsman for financial services would have a positive impact on consumer rights, in a way the industry-funded ombudsman offices could not.
However, the Irish Insurance Federation said insurers were against the idea of a single statutory ombudsman. It said the benefit of the existing insurance and credit institutions schemes was that they were voluntary and avoided recourse to the courts in dealing with the majority of disputes.
The IIF also maintained that the placing of ombudsman schemes within the regulatory framework would confuse the different roles of regulators and arbitrators.
The Director of Consumer Affairs, Ms Carmel Foley, said the establishment of the IFSRA would end the fragmentation of regulators in the sector. Ms Foley said this would facilitate the sharing of information and would be in consumers' best interests.
The consumer protection functions currently exercised by the Director of Consumer Affairs regarding financial services will be integrated with the prudential regulation of financial services within the IFSRA.
"We are happy to be passing on this bloc of work to a specialist body and to see consumer protection on a equal footing with prudential regulation," Ms Foley added.
She saw no conflict of interest between the two functions and said there had been an artificial distinction between them.
The Institute of Chartered Accountants in Ireland warned that the new board of the IFSRA would have to oversee tensions that would certainly arise between the prudential and consumer wings of the new structure.
