Ciarán Cannon (Galway East, Fine Gael) | Oireachtas source

As previously said, it is very useful to have this debate. I have listened carefully to everything that has been said. In an ideal world, no one would have to pay the extremely high rates of interest charged by moneylenders. Others have said that the only thing worse than high interest credit is no access to credit at all. I argue that forcing people who are at a point of crisis, as Deputy Michael McGrath rightly described them, to avail of illegal moneylending is an even worse scenario.

We will press the amendment because it will give the Department time to consider and evaluate the interest rate restrictions report and consult with others to have an evidence-based approach to the development of public policy on moneylenders. In considering that policy, we will not separate the recommendation that rates be restricted from the proviso that these restrictions are to be conditional on there being a reliable alternative to licensed moneylenders. Key to that is getting the credit union movement to commit to serve the community currently serviced by money lending firms, subject to adherence to prudent credit guidelines. As said in the opening speech of the Minister of State, Deputy D'Arcy, the work that needs to be done in this regard includes considering how we will persuade the approximately 50% of other credit unions to take part in the personal microcredit, PMC, scheme and how we will cater for individuals on low incomes who are not social welfare customers, since that PMC scheme only works for social welfare recipients. We need to analyse the sector in more detail to see the impact that setting interest rate restrictions is likely to have on the various types of moneylenders and to examine illegal moneylending as well as we can.

The Social Finance Foundation, which has been identified by Deputy Pearse Doherty as a source of his motivation in bringing forward this Bill, has told us that it would be premature to fix an interest rate for moneylenders in advance of this work being concluded. We are not convinced that a fixed rate cap is the only answer available to us. It is a blunt approach to a highly nuanced issue. I appreciate that we are considering the principle of the Bill and that the justification for the rate could be considered later. I wish to highlight that putting a fixed rate in primary legislation means that it can only be amended by primary legislation. While Deputy Doherty's proposal is succinct and clear, the situation in real life with regard to what people have to deal with daily is much more complex and worthy of more detailed consideration before we proceed further. The Minister of State, Deputy D'Arcy, has said that he acknowledges that there is a problem which needs to be addressed and that he will act with urgency in arriving at a solution that works in everyone's interest.

See this speech in context