Martin Cullen (Waterford, Fianna Fail)

I would like to achieve a scenario in which people have no need to go to moneylenders in the first instance and can instead access legitimately the main stream of financial services to which most of us have access. The difficulty is that people on very low incomes get themselves into debt and find it very difficult to access credit from the normal institutions with which most of us deal on a daily basis. They end up in what are regarded as legal institutions elsewhere.

The Deputy has rightly identified the Financial Regulator who is entirely independent in this matter and has a direct responsibility along with the Minister for Finance. The levels of interest being charged in these circumstances are quite exorbitant. Since I made certain comments, it has been pointed out to me that while it may be quite easy in some respects to reduce the level of interest charged, I may still not achieve the end at which both Deputy Shortall and I aim. Deputy Shortall has outlined that end in the House this afternoon. I am informed that the rates of interest in question are usually charged on very small amounts of money which are repaid over short periods. If the outcome is to cap interest rates, people may be charged at a lower rate but over a much longer period and no significant difference will be made. It is important to note also that there are more issues than this one involved in the wider context of financial markets, including the legitimate moneylending market, which have consequences elsewhere.

While I am having discussions in this area, I am not sure as I speak today where the answer is. One may turn a corner and think one sees the answer there, but it may be pointed out very quickly that adopting that course may achieve the opposite of what one intends. Discussions are taking place in the tripartite group on the issue and the database MABS now has will be very important in informing the decision which is finally made. The Deputy and I both want to ensure that vulnerable people on low incomes can access credit which does not impose the exorbitant interest rates charged by some of the legitimate moneylending institutions. The credit unions, for instance, are working very actively with people on low incomes.

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