Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I agree. That is the subject of this legislation. To follow up on that, Dr. McCarthy and Dr. Byrne wrote in their report that global interest rate restrictions have become more prevalent in both developed and developing countries in recent years. They state that in Europe there has been a clear trend towards the use of interest rate restrictions as a policy tool to control the high cost of credit. The report goes on to say that, to date, 21 out of 28 EU member states now have some form of interest rate cap on credit. It says that Ireland is now in the minority of countries in Europe that has no formalised interest rate restriction on high-cost credit and points out that the only cap we have is on credit unions at 12%. I agree with the report's recommendation and I will appeal to the Minister for Finance to use this legislation to do both, that is, reduce the interest rates that can be charged by moneylenders while, at the same time, marginally increasing the cap for credit unions.

According to the report, other countries introduced a cap because they saw ultra-high interest rates as unjust. Germany says they lack moral legitimacy and Spain deemed them excessive. Finland reported it as unconscionable. However, in Ireland it appears to be fair game.

With interest rate caps elsewhere in Europe being legislated for or dealt with, what has been the international experience as a result? I am conscious that there might not be the same type of strong credit union network in those countries such as we have in this jurisdiction. Have the witnesses looked at the international experience of what happens when there is a cap on interest rates for high-cost credit?