Dáil debates

Thursday, 10 March 2022

Consumer Credit (Amendment) Bill 2022: Second Stage


1:50 pm

Photo of Dessie EllisDessie Ellis (Dublin North West, Sinn Fein) | Oireachtas source

It is unfortunate people must borrow money to make ends meet. They might need to replace a broken utility such as a washing machine or fridge, get their car fixed or cover the cost of family events like communions and confirmations or expenses at Christmas. For the most part, people mostly take out relatively small loans with moneylenders. These are then charged at a very high interest rate.

Research carried out in 2019 by the Social Finance Foundation found there are an estimated 330,000 customers of moneylenders in Ireland with an average loan size of €566. Loans tended to be offered over a nine-month period with an annual APR of 125%. Moneylenders give people these small loans that are then paid back over a short period of time and these loans are charged at exorbitant interest rates. Borrowing from moneylenders is perhaps one of the most expensive ways for an individual to borrow money.

Moneylenders can at present make door-to-door calls for payments but do so at a charge. This legislation will end this practice and that is to be welcomed. Figures from the end of 2019 show there were 38 licensed moneylenders in the country with approximately 300,000 customers. Of these, 28 were door-to-door moneylenders and two were catalogue moneylenders.

Findings from the research by the Social Finance Foundation further found the majority of those who use moneylenders are female and in the lower-income socioeconomic groups. They were typically aged between 35 and 55 years. For many, the moneylender is the lender of last resort and for those who use their services there is a high price to be paid, as people can be trapped in a cycle of debt and borrowing. For the most part, this makes a bad situation even worse in the long term.

While this Bill is an attempt by the Government to regulate moneylenders with a view to preventing those seeking loans from going to illegal moneylenders, the reality is the Bill does not adequately address the exorbitant interest rates moneylenders charge. We advocate a more substantial reduction than what the Government is proposed as the interest cap. If Government has a concern about people going to illegal moneylenders it should be noted An Garda Síochána has considerable powers under existing legislation to stop, question, search and seize money from those they suspect of illegal moneylending. There are also severe sanctions, such as massive fines and long prison sentences that can be imposed. It is important moneylenders are properly regulated and that people, especially vulnerable people in our communities, are not be exploited by moneylenders. I have concerns about this Bill and would like the Government to get it right now so we are not revisiting this issue in future.


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