Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Yes. We have had much pre-legislative scrutiny of this, including examination of my legislation, and the fear of illegal moneylenders is not seen as a reason to reduce interest rates.

The point I am making is that moneylenders having to calculate ability to pay is good. I welcome it. That misses the real point, however, as the default rate with moneylenders is very small anyway. People pay these loans and the issue is not the ability to pay. It is the fact that moneylenders are fleecing these people. If a person borrows €1,000 and pays approximately €560 in interest, rolling it over by taking out a new loan each year, in four years that person will pay over €2,000 in interest on the original €1,000 loan. That is the problem. It is not ability to pay because evidence indicates the people will pay the loan. The issue is the loan will have cost the family thousands of euro in interest over four years. That is the problem. The practice will be allowed to continue where Mary and Joe come to the end of their term and the moneylender might say that Seamus is going to college next year and offer a loan for that. The lender will offer to work out the paperwork in taking out the new loan. The €1,000 that people will have "repaid" is still be paid and the lender will take another €560 in interest.

That is the issue and it is immoral that a type of loan such as this is rolled over continuously, and this happens with many families. It ends up costing an individual thousands of euro and multiples of the capital that was originally taken out.