Michael Healy-Rae (Kerry South, Independent)
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Question 154: To ask the Minister for Finance his plans to ensure that persons will not be exposed to having to pay exorbitant rates of interest when they borrow money; and if he will make a statement on the matter. [16844/12]

Michael Noonan (Limerick City, Fine Gael)
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Illegal money lending is a criminal offence and a matter for An Garda Síochána to investigate. Licensed moneylenders are subject to strict legislative requirements. In this regard, the following position applies:

· Licensed moneylenders are subject to provisions in the Consumer Credit Act 1995 (the Act) and the Central Bank's Consumer Protection Code for Licensed Moneylenders (the ML Code).

· Section 93 of the Act sets out the Central Bank's powers in relation to the grant or refusal of a moneylender's license and includes a provision whereby the Central Bank may refuse to grant a moneylenders license if it considers that the cost of credit proposed in a license application is excessive or any of the terms or conditions attaching to a license application are unfair.

· Licensed moneylenders are prohibited from offering top-up loans to consumers under Section 99 of the Act,

· Section 110 of the Act sets out requirements relating to prohibitions on collecting repayments at certain times.

· Section 112 of the Act prohibits licensed moneylenders from applying increased credit charges on a defaulted loan.

· Licensed moneylenders are obliged to inform the consumer of the cost of credit per €100 borrowed under common rule 2 of the ML Code.

· Licensed moneylenders are subject to the 'Knowing the Consumer' and 'Suitability' requirements, as set out in Chapter 2 of the ML Code.

· Licensed moneylenders are prohibited from offering unsolicited pre-approved credit facilities to consumers under common rule 31 of the ML Code.

· Licensed moneylenders are obliged to assess the creditworthiness of consumers before concluding an agreement with the consumer in accordance with regulation 11 of the European Communities (Consumer Credit Agreements) Regulations 2010.

Interest rate caps for licensed moneylenders are not provided for in law there are no interest rate caps applied by the Central Bank apart from the interest rate cap imposed on the credit union sector.