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

I understand the point made about the people we are dealing with. There is an item in the legislation that is new and is not in existing legislation. For the first time we will have legislation whereby the loans can only extend for 12 months. Up to now there was not a 12-month limit and loans could roll over very simply. It did not have to be a new loan. Under this legislation, the loan must be repaid and it must be only a 12-month loan. A new loan would be required to be taken for a second period.

The Deputy has said that towards the end of a loan term, a customer would be offered a new loan. The second item in the legislation that did not exist heretofore is the obligation to carry out a review of the ability to pay the loan within the 12 months before issuing that loan again. In the past moneylenders were piling loans on people and maybe two or three moneylenders were calling to some houses. Now there will be a requirement to know the total ability of the person taking the loan to repay it through normal credit checks. They did not have to do those up to now. There are approximately 40 companies in the country that will rely on the Central Bank of Ireland for approval for the period of their licence and if it finds they are not complying with the obligation and are giving loans to people where it is reasonable to say they are not able to repay the loans, it will affect the Central Bank's view. With this legislation, it can take such consideration when reviewing or examining the licence. It is a new element.