Brian Stanley (Laois-Offaly, Sinn Fein)

The Consumer Credit (Amendment) Bill aims to introduce a cap of 40% on the amount of APR a licensed moneylender can charge a borrower.

To our shame, the State has failed to introduce any cap on interest charged by licensed moneylenders, allowing the 46 licensed moneylenders to charge as they will. The highest rate being charged, at 210%, is scandalous. This is forcing households into spiralling debt that will never be cleared. Households which cannot access credit from the banks or credit unions live in permanent debt. They are always burdened about how they will clear this. What should be enjoyable occasions, such as first communions, Christmas and birthdays, become a nightmare for them and turn into crises in that they worry and torment themselves about how they will find money for them.

The Bill is a reasonable response to a massive crisis. We are dealing with legal money-lending tonight, but I have seen the effects of both legal and illegal moneylenders, particularly on the most vulnerable. We fully understand that if we propose an APR that is too low - Sinn Féin is trying to be reasonable about this - we will force legal moneylenders underground, the sector will become totally unregulated and that will only lead to further and more sinister problems with illegal moneylending.

In County Laois I have witnessed the effects of the crisis, with both legal and illegal moneylenders. I have come across cases where children's allowance books are held as a surety by moneylenders and women are forced to hand over money each month outside the post office. As I found out in reply to a parliamentary question, there have been no prosecutions in the State in the past seven years for that type of activity by moneylenders.

Moneylending is not done by some small group of shady individuals sneakily driving around the estates. The biggest moneylender, as Deputy Pearse Doherty stated, is a multi-million euro institute called Provident, which is mainly owned by banks and large financial institutions. Provident has the largest share of the moneylending market in the State, yet, because its headquarters is in London, it is under no obligation to publish figures on its trading balance and profit here. All we know is that there are approximately 100,000 doing business with it, if one could call it that. We estimate its Irish profits are high. What we know is that Provident, internationally, is set to make millions of euro in profits again this year and in the coming year.

The Bill does not pretend to solve all of the problems facing families caught up in the awful spiral of debt but by not supporting the Bill, the Government remains out of step with our EU partners. There is much talk in this House about being in step with the rest of Europe and being good Europeans. Let us be good Europeans by supporting this Bill. Thirteen states have a cap on the interest rate moneylenders can charge, with an average APR of 15% to 20%.

One of the longer term solutions is that families which normally do not have access to bank or credit unions would have that. One in six adults are excluded completely from the banking and financial sector which means they have no access to loans or mortgages as those in the mainstream who are working have. The irony of this is that some of the banks which are refusing them permission to open a bank account are owned by the State. The State should use its influence - I appeal to the Minister of State, Deputy Brian Hayes, to bring this to the attention of the Government - to encourage banks to allow those who are poor and those with small amounts of money to be able to open bank accounts. To date, the banks have behaved disgracefully, keeping those on the margins in the grasp of legal and illegal moneylenders. Ultimately, there is a need for a not-for-profit lending institute the sole function of which would be to make small interest-free loans available. The credit unions could play a more active role in this regard.

I urge Deputies from all parties to back this Bill. The Bill is about relieving poverty in the State.

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