John Lyons (Dublin North West, Labour)
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Question 133: To ask the Minister for Finance his plans to regulate money lenders and debt collectors; and if he will make a statement on the matter. [22404/11]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy may wish to know that there is already a comprehensive regulatory licensing system in place for moneylenders. Moneylenders have to apply to the Central Bank annually to have their licenses renewed. Section 93 of the Consumer Credit Act 1995 (as amended) sets out the Central Bank's powers in relation to the grant or refusal of a moneylender's license. The appropriate moneylending application form (new or renewal) must be completed and returned to the Central Bank with a number of items, for review and consideration. In addition to the licensing system, the Central Bank has in place a Consumer Protection Code for Licensed Moneylenders (the Code). The Central Bank has power to impose sanctions on moneylenders for a contravention of the Code. The Code sets out the General Principles with which a moneylender must comply. For example, a moneylender must act honestly and professionally, with due skill, care and diligence in the best interest of consumers. The Code also places requirements on moneylenders in relation to the provision of information to the consumer, preservation of a consumer's rights, knowing the consumer, suitability, unsolicited contact (cold calling), disclosure, errors, handling complaints, consumer records, unsolicited credit facilities, arrears and guarantees, debt collection and the contents and presentation of advertisements.

On 18 February 2011, the Central Bank published the results of a themed inspection of licensed moneylenders. The inspection showed a high level of compliance amongst firms, with the requirements of the Code. Inspections were conducted in 11 of the 46 licensed moneylenders currently operating in Ireland. The inspections focused on whether consumers were being charged in accordance with the moneylenders' authorised APRs (Annual Percentage Rates) and costs of credit as set out in the moneylenders' licenses. It also examined whether firms had their licenses on display and if they indicated the high-cost nature of loans on loan documentation issued to consumers, as required by the Code. Overall the inspections found a high level of compliance with the requirements and that consumers were being charged in accordance with the moneylenders' authorised APRs and costs of credit. In addition, firms had their licenses on display and indicated the high-cost nature of loans on loan documentation issued to consumers.

I would expect that, in future, the Annual Regulatory Performance Statement of the Central Bank will refer to the regulation of moneylenders. This statement will be presented to each House of the Oireachtas. The Central Bank Reform Act 2010 provides that a Committee of the Oireachtas may request the Governor of the Central Bank or the Head of Financial Regulation to attend before it and provide information relating to the regulatory performance statement. This will allow deputies the opportunity to seek relevant information on regulatory matters, including the regulation of moneylenders.

The regulation of debt collectors is a matter for my colleague, the Minister for Justice and Equality.