Michael Noonan (Limerick City, Fine Gael)

I would like to thank all Deputies from all sides of the House for their useful contributions to this worthwhile debate. The Government is well aware of the financial difficulties facing persons who have to resort to moneylenders for loans to meet everyday bills. This point was highlighted in the debate. It is the responsibility of the Government to ensure that the legislation underpinning the moneylending service is robust and rigorously enforced. The interest rate charged by licensed moneylenders, which on the face of it seems particularly high, is one aspect that must be kept under review so as not to further affect vulnerable persons who, for whatever reason, have no other source of credit. I now turn to several issues raised by Deputies during the debate. As mentioned last night by the Minister of State, the Central Bank is the regulator for moneylenders and under section 93(10)(g) of the Consumer Credit Act 1995 the Central Bank may refuse to grant a moneylender a licence if in the bank's opinion the cost of the credit to be charged is excessive or if any of the terms and conditions attaching thereto are unfair. Deputies raised the issue of the lower of interest rate charged in other member states. I am advised that it is misleading to attempt to make simple comparisons purely on the basis of money lending rates since the financial markets and the regulatory regimes for moneylenders that pertain in euro member states vary considerably. We will continue to monitor developments in the European Union.

The Central Bank has experience in licensing moneylenders and in examining what may be termed excessive or unfair lending as set out in section 93 of the Act. The Central Bank is best placed to develop guidelines which will provide greater transparency with regard to the rates charged. This a complex issue and it is vital when considering the need for further legislation to have the full facts in order not to exacerbate the current situation, to which Deputies alluded to during the debate. It may take time and effort but it is important that the appropriate policy is implemented.

Where a moneylender engages the services of a third party to collect debts on his or her behalf, he or she must have in place a written contractual arrangement that seeks to ensure that customers are treated in accordance with the provisions of the Central Bank's consumer protection code for licensed moneylenders. The moneylender must also inform the affected customer that the money lending arrangement has been assigned to a third party as soon as practicable following the assignment of the money lending agreement.

Deputies also referred to the work of the credit union movement to provide an alternative to those whose only recourse to credit is the moneylender. In the programme for Government the Government has recognised the importance of the credit union movement as a volunteer movement and distinguishes between credit unions and other financial institutions. Credit unions, operating close to the population they serve, remain a central part of the Irish financial landscape. There are in excess of 400 credit unions in the State and all communities should have ready access to a branch for savings and, in turn, for loans. The Government recently published the general scheme of the credit union Bill which makes provision for the future development of the credit union sector with a view to ensuring the continued access to reasonably prices lending by local communities.

Deputy Ferris referred to the delay in dealing with an appeal by a constituent to the Department of Social Protection. The person was then forced to resort to a moneylender for day-to-day expenses. I am advised by the social welfare appeals office that the number of appeals to that office has increased dramatically since early 2009. For the first half of this year alone, approximately 19,000 appeals have been received. In an effort to reduce the processing time for all appeals the Department has appointed 13 additional appeals officers since 2010, bringing to 40 the total number of appeals officers now serving. In addition the office has improved its business processes and its information technology support. I hope these actions will alleviate the problems drawn to the attention of the House by Deputy Ferris.

Reference was made in the debate to financial education. The National Consumer Agency has a statutory remit to promote the interests of financial services by providing information on financial services, including information on the cost to consumers and the risks and benefits associated with the provision of those services, and by promoting the development of financial education and capability. The agency consistently points out that consumers should consider the interest rate charged for credit arrangements and the overall rate of credit rather than simply focusing on the weekly or monthly payments. The agency also highlights the importance of checking that a moneylender is licensed and the dangers of dealing with illegal moneylenders. The agency has several financial education programmes targeted at various sectors of society. These include workplace financial programmes designed to provide employees with access to free personal finance education in their workplace. This information is impartial and is offered free of charge. It covers topics such as money planning, savings, insurance and pensions. The agency has also developed a scheme aimed at senior secondary school students and one for new parents, circulated though maternity hospitals to approximately 60,000 parents each year.

I thank Deputy Doherty for proposing the Private Members' Bill and all Deputies for the constructive debate on this important issue. This is a worthwhile debate and we must ensure that the implications of any amendment to the existing arrangements are fully considered. Deputies can rest assured that the Government remains fully committed to financial inclusion and to access to credit for all at a fair cost. The are 46 licensed moneylenders in the country. The debate was interesting and I will draw the debate to the attention of the Central Bank Governor so that he can reflect on how he moves it forward.

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