Catherine Byrne (Dublin South Central, Fine Gael)

I commend Deputy Doherty for introducing the Bill. I listened with great interest to the debate last night and tonight from Members on all sides. I have raised this issue before and I have major concerns. I have spoken about it on numerous occasions, including to the Minister. Moneylending is as old as time and has become a tradition in some families and communities, when more conventional means of borrowing are not an option. The reliance on moneylenders is causing havoc in communities such as the one I represent, where people are getting into huge debt with no prospect of being able to repay. This also applies to people who had never before gone to moneylenders. We know that most people turn to moneylenders when they cannot get a loan elsewhere. Unfortunately, the trade-off for such quick access to a loan is the high interest rates charged.

We must distinguish between legal and illegal moneylenders because many are licensed and operate within the law. I have listened to the discussion on the interest rates for legal moneylenders. High interest rates should be reduced and the Minister for Finance, Deputy Noonan, is committed to approaching the Central Bank to speak about the issue. The high interest rates are legal because, we are told, they could not operate a viable business otherwise. A rate of 40% should not be the cap but rates such as 197% are totally unreasonable and must be addressed. There must be a realistic approach to limiting the interest rate for those who must borrow from these sources.

The real issue is illegal moneylenders, who all too frequently terrorise individuals and their families. I dealt with a girl last year who was followed to the post office by the moneylender when she withdrew her children's allowance. The moneylender waited outside to be handed the money owed. It is a terrifying experience for the many people who experience it on a regular basis. Where the traditional institutions are not an option, and when money is scarce, moneylenders are the only option for many people. A speaker last night said that parents must educate their children and encourage them to save and not to borrow unnecessarily. Sadly, those who go to illegal moneylenders do not have money beyond what is in their pockets. Many struggle to put a dinner on the table at the end of the week. If people do not have the money, they cannot save it. Let us not fool ourselves.

Very few people in this building have never borrowed money and it is wrong to say that borrowing and repaying money is confined to a certain section of people. The only difference is their access to loans from banks, whereas those who go to moneylenders do not have such access. How do we resolve the problem of illegal moneylending and how do we stop people getting themselves into massive debt? The Garda Síochána has a responsibility to pursue illegal moneylenders but it is difficult for them because I have spoken to people who are terrified to identify illegal moneylenders. It is difficult for the Garda Síochána to assist when people are not prepared to come forward. They are afraid of being harassed, of their children being harassed and of their homes being set upon. Our focus must be to deter people from relying on moneylenders, whether legal or illegal.

The only way forward is to provide small loans to those who need them and the credit union is an institution with the capacity to do so. The role of the credit union when I was growing up was to be the people's bank. It must continue to be the people's bank and give out small loans. It should be the first port of call for families in need. They need to open their doors and enable people on low incomes to borrow small amounts even if they do not have a good credit rating. While I accept that ability to repay is very important, it is possible that the credit unions can work with the Department of Social Protection, MABS and other agencies to operate a system of repayment via social welfare payments to the credit union. This would be an asset to those caught up in illegal moneylending. We urgently need to help those who cannot deal with banks and offer options other than borrowing from moneylenders. Last night the Minister of State said that all advertisements must contain the following warning in large font: "WARNING: This is a high cost loan". Unfortunately, many of those who must borrow do not read large or small font so, unfortunately, I cannot support the Bill. However, I think the Minister will continue to try to resolve this matter.

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