Joan Burton (Dublin West, Labour)
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Question 109: To ask the Tánaiste and Minister for Finance the proposals he has to regulate the area of sub-prime lending; his views on the issue of re-financing packages as offered by a number of sub-prime lenders in view of the fact that such packages often include the family home, credit card debt and short or medium term loans such as car finance; if such packages are excessively risky; and if he will make a statement on the matter. [23668/07]

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 124: To ask the Tánaiste and Minister for Finance when it is expected that the new regulation of non-deposit taking lenders, including what is described as sub-prime lending, will be introduced. [23650/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 109 and 124 together.

I have already announced my intention to propose an amendment to the Markets in Financial Instruments and Miscellaneous Provisions Bill 2007, at Committee Stage this week, with a view to regulating the non-deposit taking lending sector. The text of the amendment has already been circulated. The main aim of the proposed measures is to ensure that borrowers from sub-prime lenders, or from other lenders in that sector, will be able to benefit from the additional safeguards which the Financial Regulator's Consumer Protection Code provides.

With respect to the issue of re-financing packages, The Financial Regulator has drawn attention to the need for consumers to choose the right type of loan for their needs and in particular to carefully consider the long-term effects of consolidating personal debt into new or existing loans or mortgages. Despite a possibly lower rate of interest or lower repayments, the consumer can end up paying more in the long term because the consolidated loan lasts much longer than the original loans. Also, if the new loan is secured by a mortgage their home could be at risk in the event of failure to keep up repayments. Individual decisions in relation to consolidating loans, like those in relation to any other form of credit, are primarily a matter for the borrower in each case. They should only be taken after careful consideration of the available information and taking full account of how their personal circumstances or the financial environment may change. As has been highlighted by the Financial Regulator, consumers should carefully examine their needs and means beforehand, shop around and examine all of the options.

Where difficulties arise in keeping up repayments on any form of credit the advice given by the Financial Regulator and by the bodies and agencies that help people who are in financial difficulty may be summarised as three key points:

Don't ignore the problem.

Take action as early as possible and keep lenders informed.

Contact the Money Advice and Budgeting Service (MABS). Early action on these lines may pre-empt the need to consider re-financing or consolidation of debt.