Joan Burton (Dublin West, Labour)
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Question 421: To ask the Minister for Finance his plans to cap interest rates on money lending transactions; and if he will make a statement on the matter. [31896/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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At present, moneylenders are covered by a range of provisions under the Consumer Credit Act 1995, (the Act), including the annual licensing process and the register of licensed moneylenders system as administered by the Financial Regulator.

Consumers who avail of loans from moneylenders, licensed under the Act, are entitled to a considerable amount of information in relation to such loans. Moneylenders are required to assist consumers to understand the products on offer. They must provide the following information to their clients: * the method of repayment of the loan, and * details of all fees, related interest payments, charges and the cost per 100 euros borrowed.

They must also indicate prominently the high-cost nature of the loan on all loan documentation where the APR is 23% or higher. This disclosure must take the following form: 'Warning: This is a high-cost loan'

These requirements are set out in the Financial Regulator's 'Consumer Protection Code for Licensed Moneylenders'. This Code came into full effect on 30 September 2009.

I should add that one of the conclusions of the report on the 'Licensed Moneylending Industry', published by the Financial Regulator in March 2007, was that the introduction of an interest ceiling for moneylenders may not achieve the objectives of lowering the cost of credit for consumers.

I would encourage consumers to shop around and consider all the different sources of loans that are available to them. I would also encourage them to avail of the personal finance information that is available from the National Consumer Agency. This information can be found on the website www.itsyourmoney.ie. In addition, to the information provided on this website, people who are in debt or in danger of getting into debt may avail of the services of the Money Advice and Budgeting Service (MABS). MABS works with people in order to assist them with their financial planning and budgeting for the future. It is a national, free, confidential and independent service.