Written answers

Wednesday, 18 September 2013

Department of Finance

Financial Services Regulation

Photo of Seán KyneSeán Kyne (Galway West, Fine Gael)
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219. To ask the Minister for Finance if he is satisfied that the existing primary legislation and regulations provide adequate protection for consumers against exploitation by so-called pay-day lenders. [38085/13]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The Central Bank has advised me that where the Annual Percentage Rate to be charged on a loan to a consumer is over 23%, a lender will need to get a moneylender's licence from the Bank unless excluded under the Consumer Credit Act 1995, for example pawnbrokers and credit unions subject to other regulation. A “pay day” loan is usually a short-term loan to cover a borrower's expenses until his or her next payday, with the first loan running for about one month. To date, the Central Bank has not granted a moneylender's licence to any firm operating with a “Pay Day” loan type business model. Under Section 93(10)(g) of the Consumer Credit Act, 1995 (as amended), the Central Bank can refuse to grant a licence where it deems the costs to be charged on the loan to be excessive. Moneylenders have to apply to the Central Bank to have their licences renewed each year.

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