Mary Lou McDonald (Dublin Central, Sinn Fein) | Oireachtas source

Despite the fact that it is still only November, we are now in the run-up to Christmas. Any family with small children would state that is now 27 sleeps until Santa arrives. For many families, the reality of making Christmas happen is one of stress and expense. Regrettably, providing even essentials is beyond the means of many. That unfortunate reality means that many families resort to borrowing money, some from friends, family members, credit unions or banks. However, that will not be an option for others and many of them will resort to borrowing from moneylenders and loan sharks who, in many cases, are unlicensed and charge punitive and frankly disgusting interest rates. They are a scourge on our society.

There is also a licensed moneylending industry in this State whose practices are equally repulsive. A UK-based moneylender, Amigo Loans, has been given a licence by the Central Bank to operate in Ireland. The Central Bank has sanctioned it to offer loans with interest rates of up to 49.9% to people who have been excluded from accessing mainstream finance. Amigo Loans considers that to be mid-cost credit. I would call it daylight robbery. Amigo Loans is not the only entity involved in this game. A fortnight ago, the Centre for Co-operative Studies at UCC published a report on behalf of the Social Finance Foundation. That report indicates that moneylenders in this State are licensed to charge interest rates of up to 187% which, when collection charges are added, rises to an average percentage rate, APR, of 287%. The report also states that a total of 21 of the 28 EU member states apply caps to high-cost credit. That includes Ireland but, ironically, the only cap we apply is in respect of credit unions. We do not apply any cap on moneylenders. That is the reason moneylenders go door to door delivering leaflets at this time of year, preying on the vulnerabilities of people coming up to Christmas and charging these kinds of extortionate rates. Moneylenders are getting rich on the back of hard-pressed people who are simply trying to provide for their families. They can do this because the system in place allows them to do it. This is State-sponsored robbery. There is an urgent need to introduce a cap on the interest rates these types of outfits can charge. There is also a need for more wide-ranging reform of the regulation of moneylenders and the policing of illegal loan sharks.

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