Maureen O'Sullivan (Dublin Central, Independent)

There is no doubt some people value doorstep credit, even if it could have severe consequences. It has to be acknowledged there are occasions when people need to quick access to credit. Representing Dublin Central, I know moneylending of the illegal kind has been a fact of life there for many years. Going back to the days of the Monto, the largest red light district in western Europe at the time, moneylending was a feature of life.

Another feature of life in Dublin Central was that people could buy goods "on tick" from various shops. The pawn shops in the constituency used to do a roaring trade but not anymore. There is a need to acknowledge that people need money and we must ensure they can access it easily.

I am concerned, as a result of the economic recession and the number of job losses that have occurred, about people turning to moneylenders and, in particular, those which are unlicensed. Community and voluntary workers have much evidence that this is happening. Deputy Michael McGrath and others have stated these are the lenders of last resort. However, I know people for whom they are the lenders of first resort. This is because those to whom I refer are not in the habit of going to credit unions or banks. I am a strong supporter of credit unions because I am aware of the work they have done to assist people in various communities. What is great about credit unions is the tradition on which they are based, namely, that people must save in order to borrow. Credit unions accept the smallest amounts in savings. The credit union in the East Wall area in which I live is one of the oldest in the country. I know young people whose parents encouraged them to join the credit union once they began to earn a few bob. That is how the tradition of saving in order to borrow is maintained.

The banks have fallen down considerably on this matter because they provide people with little or no encouragement to invest small amounts with them. Credit is due to An Post because of the stamp systems it operates. One example in this regard is that a person can purchase a stamp each week and put it towards paying for his or her television licence when it falls due for payment. The Money Advice and Budgeting Service, MABS, is often left to pick up the pieces when people get into difficulties.

A balance must be struck in respect of interest rates which must be capped but not to the extent that they discourage institutions from lending and thus oblige more people to turn to unlicensed moneylenders. A practice has developed whereby people borrow from moneylenders and then obtain a second loan in order to pay off the first. What is happening in this regard must be regulated in some way.

Sinn Féin hosted an interesting briefing on this issue earlier today at which reference was made to the TASC report, which indicates that the poor borrow more than the middle class and that they pay more for their loans. We are aware that some of the most dangerous moneylenders are those who would be termed "legal". These lenders charge high interest rates on loans and fees, for insurance. In addition, they offer multiple loans. I have read a report on one licensed moneylender in which it is indicated that for every €100 borrowed for one year, the company charges €56. This means that the APR on a six month loan is 187.2%. I must emphasise that this is a licensed moneylender. One can only imagine what illegal or unlicensed moneylenders are charging for loans.

The banks currently exclude 20% of the adult population from the services they offer. We are aware that there are people who would like to have bank accounts, but they are not approached by the banks as potential customers. I came across three recent newspaper headlines which read as follows: "Middle class families secretly caught by moneylenders"; "Illegal moneylenders 'instil fear in thousands'"; and "Caught in a trap". The Society of St. Vincent de Paul compares moneylending to a cancer. It states that if one person in a community borrows from a moneylender, the word gets around that there is money to be had. Suddenly, everyone in the community is borrowing from a particular moneylender. People in Dublin Central have been obliged to borrow from illegal moneylenders to pay the drug debts of their family members. This has led to massive intimidation.

I will support the Bill. However, the credit unions' suggestion the interest rate which should apply to loans from moneylenders should not exceed 25% rather than the figure of 40% put forward by Sinn Féin should be considered. After all, there are enough Shylocks about the place charging exorbitant amounts of interest, etc. The banks must take on board the fact that during the Celtic tiger era they sponsored personal recklessness when it came to borrowing.

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