Séamus Brennan (Dublin South, Fianna Fail)

I do not accept that nothing was done in this area prior to the publication of this welcome report, for which MABS and the Society of St. Vincent de Paul provided funding. MABS has expanded over the years and now has more than 220 staff and a dramatically increased budget. This year alone we gave it €700,000 on top of the normal increase so that it could continue to advise people on managing money.

Deputy Penrose's remarks on legal moneylenders were fair. Three options are available to those seeking money. Ordinary lending rates are lower than 23% and most people take loans with single figure interest rates. Legally licensed lenders provide loans at rates above 23%, often involving hire purchase, credit cards and a range of financial products. To an extent this must be legal because the financial products provided are different from ordinary day to day lending. People should be warned that it is expensive to take this type of loan. I commented earlier on the third option of illegal lenders. I will continue to discuss this matter with the Ministers for Finance, Enterprise, Trade and Employment and Justice, Equality and Law Reform, each of whom has responsibilities in this area.

Interest rates for credit cards, hire purchase and other similar financial products will always be substantially higher than overdraft or mortgage rates. MABS ensures that this is understood, in particular by those who are vulnerable. Last week, I raised with banks their need to respond to this report because otherwise they will find that vulnerable people are forced to the second option of high rate legal moneylenders. We do not want to so force them when funds are needed.

I will consider the anomalies raised by Deputy Penrose, of which a significant number exist. As people transfer from welfare to work, a balance must be achieved so that pay is sufficient to support people and allow them to look after their families while also encouraging them to return to education or work. It is often difficult to achieve the correct balance. We will continue to work towards removing anomalies which arise occasionally and involve small sums of money.

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