Arthur Spring (Kerry North-West Limerick, Labour)

Any licensed business is under great duress to be upstanding to citizens. The reason financial and lending institutions are licensed is because they can cause great stress and harm to people and society. I agree with the sentiments expressed by the non-government parties. As Deputy Michael McGrath stated, the most vulnerable in society are those who are always exploited by moneylenders, licensed or unlicensed. One of the first television programmes I recall was a "Today Tonight" episode from the early 1980s in which Pat Cox chased cars, pointing out extortionate moneylenders who were preying on people, offering loans for communions, Christmas and other family events.

In a proper society, everyone would either have a bank or, more importantly, a credit union account. One priority taught by grandparents in my day was how to set up a credit union account as soon as one could to save the few quid from a first communion or the selling of a calf. It showed people the benefit of delayed gratification. Every citizen should be encouraged to follow this example.

The transferability of bad loans causes me some concern because a licensed institution could send a bad loan to be chased by a debt collection agency. We have seen these agencies under many guises. Some of them have resorted to violence, taking personal belongings and crystallising unsecured assets to get back loans.

The credit unions must be promoted in society. We have a wonderful credit union tradition, particularly when compared with the United Kingdom. Members of credit unions contribute deposits which, in turn, provide for lending. In times of hardship, I do not believe any credit union would deny people some level of lending. People who use credit unions are also conscious that their credit history will also be impaired if they do not pay back a credit union loan.

There are 40 licensed moneylenders in the country. If a lender is in trouble with one, more than likely he will borrow from another to pay off the original loan, taking from Peter to pay Paul. This kind of show should stop.

The sentiment of the non-government parties, as I like to call them, is correct. However, the specifics may have problems. A 2009 UK study on high credit called for a non-profit payday loan service, funded by a government subsidy of £18 million. To cover operating costs the loans would need to cost at least 123% APR. This is a bad business model that will not serve society, lending or prudent business well.

I am glad the Central Bank will examine this Private Members' Bill and deliver a better form of management in the area of high credit. It will also have to examine, however, the elephant in the room, namely, unlicensed moneylenders. They have put many vulnerable people to the pin of their collars and have acted violently in some cases of non-payment. I thought those days were well and truly and over. We are in a credit crisis and the least well-off need to be protected most of all when it comes to accessing credit.

When it comes to the budget I will be saying the most well-off need to take a fair share of the burden and maybe even a little more. When people are stressed financially and emotionally, they will turn to what appears to be the easy option of the moneylender when it is far from it. Licensed lending institutions are obliged to provide a form of business that is beholden to the people. They make money through a banking system that we allow them to carry out. At no stage should their profits or the debt burden on individuals be extraordinary.

I am concerned about the Central Bank's ability to get things right. It needs to be given a specific mandate to examine microlending and educate people on how money works. People should understand why they need to save and how to borrow in ratio to their earnings for items like the family home or a family car. I know people from school in Tralee, with similar intelligence and ambition, who are now in debt to moneylenders because of their lack of knowledge in how to deal with money and borrowing.

While I agree with the sentiments expressed by the non-government parties on this matter, the specifics of the legislation are not accurate and need to be worked on. We need to push moneylenders out of society. That can only be done through education and encouraging credit unions to develop.

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