Mary Upton (Dublin South Central, Labour)
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Question 100: To ask the Tánaiste and Minister for Finance the reforms he has proposed to curb the actions of registered money lenders who often charge punitive interest rates; when such reforms will be introduced or published; and if he will make a statement on the matter. [28896/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Licensed moneylenders are covered by a range of provisions under the Consumer Credit Act, 1995 including the annual licensing process administered by the Financial Regulator. In this regard, the draft Directive on credit agreements for consumers, which is now at second reading in the European Parliament, will, if adopted, give rise to the need to review the Consumer Credit Act.

The Financial Regulator recently published a review of the licensed moneylending industry including whether it is appropriate, necessary and reasonable to change current regulatory policies. The report concluded that the introduction of an interest rate ceiling for moneylenders may not achieve the objectives of lowering the cost of credit for consumers.

The Deputy may wish to know that licensed moneylenders are subject to the Financial Regulator's Interim Code of Practice, which sets out a number of general principles that must be complied with such as acting fairly, with due skill and care, with appropriate resources and making adequate disclosure of all relevant information. The Financial Regulator has committed under its Strategic Plan for 2008 to undertake a review of the Interim Code of Practice for Moneylenders. This review has commenced and the target date for completion is December 2008.

In relation to legislation, I have recently established the Advisory Forum on Financial Legislation, representative of key stakeholder interests to advise and assist in the consolidation and modernisation of financial services legislation. It is intended that the Forum, as part of its work, will consider the basis for licensing moneylenders to facilitate lower costs.

The Financial Regulator provides information about the different forms of credit available to consumers, including credit cards, overdrafts, hire purchase, personal loans and money lending. The Financial Regulator also recommends a number of steps that borrowers should take including shopping around for the cheapest loan, reading all loan agreements, reviewing their debts from time to time and not taking on more debt than they can afford. Borrowers should immediately get in touch with the lender if they have any difficulty in meeting repayments, or contact their local MABS centre.

I strongly endorse the Financial Regulator's advice. In particular, I would urge all consumers to shop around for credit, to examine the scope to borrow from community based lenders such as credit unions, and to avail of the moredetailed information which is available through the Financial Regulator's publications, help-line (Lo call 1890 77 77 77) and website: http://www.itsyourmoney.ie.