Michael Noonan (Limerick City, Fine Gael)
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Moneylenders have to apply to the Central Bank annually to have their licenses renewed. 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. Section 93 of the Consumer Credit Act, 1995 (as amended), (the Act) sets out the Central Bank's powers in relation to the grant or refusal of a moneylender's license.

In addition to the licensing system, the Central Bank has in place a Consumer Protection Code for Licensed Moneylenders. This Code applies to moneylenders licensed under the Act. A copy of the Code is available on the Central Bank's website: www.centralbank.ie. Compliance with the Code is monitored on an ongoing basis through themed inspections, mystery shopping, consumer intelligence and complaints from the Financial Services Ombudsman. Failure to adhere to the provisions of the Code may lead to proceedings under the Central Bank's Administrative Sanctions Procedures. These procedures enable the Central Bank to sanction and to fine entities, regulated by the Bank, for breaches of regulatory requirements.

The Code sets out "General Principles" with which a moneylender must comply, such that it must act honestly and professionally, with due skill, care and diligence in the best interests of its consumers. The Code also places requirements on moneylenders in relation to: (1) Unsolicited contact (cold-calling) and unsolicited credit facilities, (2) Handling complaints, (3) Arrears and guarantees, and (4) Debt collection.

Michael Noonan (Limerick City, Fine Gael)
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Moneylending firms in Ireland are licensed by the Central Bank under the Consumer Credit Act, 1995. Interest rates and financial products, including those of moneylenders, are not regulated by the Central Bank and each institution can determine the rate it charges its customers, depending on a number of factors, including risk. Interest rate caps for moneylenders are not provided for in the Act and it should be noted that there are no interest rate caps in relation to the industry categories which the Central Bank supervises (apart from the interest rate cap imposed on the credit union sector).

However, the Central Bank have advised me that they are endeavouring to increase disclosure and understanding of the costs associated with loans from moneylenders. The Central Bank has in place a Consumer Protection Code for Licensed Moneylenders. Under Common Rule 3b of the Code, prior to entering into an agreement with a consumer, a moneylender must indicate prominently the high-cost nature of the loan on all loan documentation where the APR is 23% or higher. The disclosure must take the following form "Warning: this is a high-cost loan". The Code also places some requirements on moneylenders in relation to advertising. A copy of the Code is available on the Central Bank's website www.centralbank.ie.

Furthermore, the annual percentage rate allowable under moneylending licences is publically stated on the public register for moneylenders. This register is available on the Central Bank's website. While it is noted that moneylender loans can be more expensive than other forms of credit, many of these loans are unique in nature. For example, they may be small value loans, over a short term and repayments may be collected at the consumer's home.