Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

Yes, it is the one that proposes the figures of €125. As I said, there may be justification to have a specific section in the legislation and not reduce the threshold to €125 for all credit institutions, and the Minister mentioned the question of a discriminatory approach in this respect.

Moneylenders are included in the Bill, as are credit unions and financial institutions, but the Bill will have no effect on moneylenders because they lend sums smaller than the €2,000 threshold that forces them to check the register. Also, they make loans smaller than €500, meaning there is no obligation to report the loan to the Central Bank. While the legislation puts an onus on moneylenders if they exceed the threshold, in all almost cases the legislation will have no effect. The Minister of State is correct in stating that we must deal with the larger financial institutions in respect of the quantum of money being lent to customers. We should not adopt the approach of getting the Bill up and running with the intention of dealing with moneylenders at a later stage. We do not take that approach to legislation. If there is a credit reporting system, we must capture all credit institutions coming under the confines of the legislation.

On Committee Stage I referred to the National Consumer Agency. Although the figures may be outdated, it referred to moneylenders lending an average of €100. In exceptional circumstances, this increases to €1,000. Provident Personal Credit Ireland lends up to €500. I suggested the sum of €125 to acknowledge that the threshold of €2,000 or the €500 reporting threshold does not capture moneylenders. The Minister of State mentioned that there is nothing to prevent a moneylender from calling to someone's house and lending €499 to several members of the household. A family with three adults in the house may owe €1,500 to a moneylender, yet it would not appear on the credit history. There is a likelihood that they will pay back the moneylender because someone is calling to their house every week. If a credit union has a similar loan it must report it and, although it does not have to check the register, it is also likely to do so.

It is much harder to regulate moneylenders because they are not sitting behind a desk in high street banks or credit union offices. They call to people's houses and we hear stories about them appearing with Argos catalogues and asking what people want for Christmas, suggesting that they can provide loans. Recently, someone told me they could not offer a second loan to a person who already has a loan, but they could tell the person about a loan and the person could then apply for it. How can we regulate that? In a main street bank there is greater control, but this involves going into people's living rooms. I am not saying all licensed moneylenders are involved in this practice, but it is a difficult area to regulate. It is unfortunate that the Government has decided to exempt moneylenders from the legislation. The reduction of the threshold to €125 would capture moneylenders, although I acknowledge that it would put onerous restrictions on other financial institutions. A signal must be sent to moneylenders that they will not be exempt and that we need tighter regulations on moneylenders. We allow them to charge massive APRs of up to 187%, and the least we should do is say they must come within the confines of the legislation. While the legislation applies to them in theory, in effect it does not because the thresholds are too high.

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