Jim O'Callaghan (Dublin Bay South, Fianna Fail) | Oireachtas source

I commend Deputy Doherty on bringing forward this legislation. It is important that the select committee appraises and considers legislation that comes from the Opposition. I remember when I was in the Opposition not long ago I managed to get many legislative measures to the justice committee but, unfortunately, I could not always get them through that committee because we did not get a money message. In fairness to the Government, at some stage it must have provided a money message.

Everybody here is agreed that the most important thing is that we get the legislation right and that rates of interest for moneylenders are applied properly and fairly. It needs to be properly regulated and controlled. Amendment No. 1 is proposing to amend section 93(10)(g). Subsection (10) deals with the grounds on which the Central Bank may refuse a moneylender's licence. It can refuse it on one or more of the grounds set out in the subsequent paragraphs. At present, section 93(10)(g) states that in the bank's opinion the cost of credit to be charged is excessive or any of the terms and conditions attaching thereto are unfair. Deputy Doherty's proposed amendment is that we would leave in the word "excessive" but that we would change and enlarge it by inserting that "the cost of credit is usurious, excessively high or any of the terms or conditions attaching thereto are unfair". When I looked at this first, I wondered how a court would interpret "usurious" or "excessively high". In fairness, Deputy Doherty has included that in section 103, but that requires us then to consider amendment No. 3.

My view, and I say this with respect to Deputy Doherty, is that the definition set out for "usurious" and "excessively high" is quite difficult to assess and evaluate. In the first instance, section 103(1), paragraphs (a) and (b) set out what should be the rate of interest for the first three-year period and in subsection (2) the intention is to refer to a second three-year period but it states "no later than three years after the coming into operation of this section" that the terms shall be defined. I interpret "no later than three years" is that it must be within the three years, so there is some overlap between subsections (1) and (2).

I also believe we are better off with a situation where the Central Bank can, by regulation, specify exactly the rate of interest that can be applied by moneylenders, and it should be small. We cannot have situations where exorbitant or usurious, to use Deputy Doherty's word, rates of interest are being applied. However, once one stitches it into legislation, it is then very difficult to change. One must go through the process of the Houses changing the legislation whereas if the power is given by regulation to the Minister or the Central Bank in this instance, that can be changed just through statutory instrument. My view is that we should be careful in terms of the manner by which legislation is enacted. This will be considered at some stage by a court and lawyers will be arguing about the meaning of usurious and whether it comes within subsections (1) and (2). I know from my experience introducing Private Members' legislation, and I am sure Deputy Doherty will accept this, that there is an advantage in having the back-up of the Department of Finance, its endless number of advisers, the Office of the Attorney General and all the apparatchiks of the State working on it. Ultimately, political credit will be decided elsewhere, but the most important thing we have to do is to get it right and make sure the legislation is correct. For that reason, I go along with what the Minister of State said.