Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I understand what the Deputy has said. One of the key elements of what we propose builds on the original legislation, the Private Members’ bill drafted some time ago. It goes without saying that the longer the period a person has a loan from one of these moneylenders, the more interest he or she will pay over time. One of the proposals we suggest is the loan would be restricted to 12 months. That would reduce the amount of interest people would pay over a period of time rather than having loans with a significant high interest rate running for a period of two or three years.

Second, we believe the issue of the credit unions in this regard is vital. I think we are all ad idemon that with respect to credit unions providing more unsecured loans, which they are very good at doing. It is the biggest sector in the economy providing unsecured loans. I will be meeting the credit union movement tomorrow to encourage it to lend more in that area given it has such a big footprint with approximately 400 branches around the country.

Up to now, many moneylenders have charged for the door-to-door collection of money. Every time a moneylender sends somebody out to collect money, that incurs an expensive charge. The moneylender can charge €40, €50 or €60 for a visit. We are banning that practice. All the operator's costs will have to come in under the interest rate.

The views behind the Private Members' Bill are well motivated and are all in the right place, but there are significant extra items that could and should be taken into account regarding this issue and that is why the Government published its legislation. The Government approved the heads of the Bill last year. It is not something that has just emerged now. Pre-legislative scrutiny of the Government's proposed legislation was carried out by this committee last October. Having completed that process last autumn, we listed it as priority legislation on 21 January of this year. The final text of the Bill was agreed with the Attorney General in mid-February. It was approved by Government quite recently and has now been published. The Second Stage debate on the Bill is scheduled for later today.

Overall, the theme behind what the Deputy and the Government are saying is similar but the Government probably has had the advantage of the extra time and extra pre-legislative scrutiny, the excellent paper produced by the Oireachtas Library and Research Service on the Government's proposal, and the benefit of the Attorney General, the Central Bank and the various organisations that made submissions to the pre-legislative scrutiny process. We believe our legislation, as proposed, is the best way to move forward.

When this committee considered the detailed scrutiny of the Consumer Credit (Amendment) Bill 2018, the Bill before us, some time ago, it was clear in its report when it stated:

Based on its consideration of the Bill, the Committee is of the opinion that there is a need to cap the interest rates which are currently being experienced by often financially vulnerable users of moneylenders.

[...]

The provisions contained in the Bill are a possible approach to affording borrowers necessary protection in this regard.

The committee went to state: "The Committee therefore recommends that the Bill, if proceeded with, be amended to include a provision that caps such fees and additional charges", which is happening. This committee was highly supportive of the Bill and of a cap but it did not come down on what that cap should be. I have just read from the committee's report on the pre-legislative scrutiny of this Bill. There is general agreement across the House on the introduction of a cap and the issue is the precise level of that cap The annual percentage rate, APR, of interest was mentioned. While that is not appropriate in this legislation, we are proposing a maximum period of 12 months for loans.