Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

This issue of moneylenders affects many people and it is important that we examine it. Moneylenders cause considerable concern in communities. My experience of them differs somewhat from the experience suggested by the report. I have met many people who took out loans from moneylenders and the only information they received was the figure for the weekly repayment. They did not understand the interest rate or the consequences of non-payment or building up arrears on their loans. For this reason, they repeatedly top up their loans. I am concerned by the figures showing that 62% of borrowers are females and most are from the lowest socioeconomic group as these suggest borrowers are trying to provide for their families. Sometimes desperate people do desperate things and sign up to things they do not understand.

The report states 50% of customers did not recall the moneylender assessing their ability to repay, 6% could not remember and of those who were assessed, 41% indicated the assessment took the form of a discussion. This shows that no real effort is being made to obtain evidence to show the borrowers can afford the loans. This is a serious problem. What steps is the Central Bank taking to address the issue? Moneylenders should have a duty of care to their customers and should satisfy themselves that the loans are affordable. I am familiar with many cases of loans being provided for people who could not afford them.

From listening to the delegates, some people may conclude that the Central Bank is taking a softly-softly approach to moneylenders. Is there anything in current legislation that is preventing the Central Bank from doing its job properly?

Having worked in a credit union, I can attest that credit unions have been engaging in an information campaign for many years under the slogan "Keep the Wolves from the Door". The campaign was specifically targeted at moneylenders. The problem credit unions have is that Central Bank regulatory restrictions prevent them from lending to those who are being driven into the hands of moneylenders. They cannot provide top-up loans or loans for people who are in arrears. This results in people deciding to borrow from moneylenders. Credit unions must turn away people they want to help and serve.

Of the 360,000 customers of moneylending services, how many are members of a credit union? It would be interesting to discover how many of them were refused loans by their credit unions on account of the restrictions imposed by the Central Bank on credit unions. This issue needs to be addressed by the Registrar of Credit Unions and the Central Bank. If they were to act, it may not be necessary to change the legislation. The inability of many credit union customers to obtain top-up loans is a major issue which needs to be addressed. If credit unions were allowed to do what they want to do, the world would be a different place.