Written answers

Thursday, 7 November 2013

Department of Finance

Consumer Protection

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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86. To ask the Minister for Finance his plans to regulate or outlaw the practice of money lending. [47619/13]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I have no plans to introduce legislation to prohibit moneylenders from carrying on legitimate business. Moneylenders are governed by a number of legislative obligations and supervisory requirements. Moneylenders are required to hold a licence in accordance with the provisions of the Consumer Credit Act 1995 as amended. This licence is issued by the Central Bank and must be renewed annually. Moneylenders must also comply with the requirements of Statutory Instrument 281 of 2010 on the European Communities (Consumer Credit Agreements) Regulations 2010, and the Central Bank’s Consumer Protection Code for Licenced Moneylenders.

The Code sets out general principles with which a moneylender must comply. It also places requirements on moneylenders in relation to the provision of information to the consumer, preservation of a consumer's rights, 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.

The Central Bank also monitors compliance with legislative and supervisory requirements by way of reviews, advertising monitoring, consumer intelligence and themed inspections.

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 should be 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.

The activities of illegal moneylenders are a matter for An Garda Síochána.

I would like to inform the Deputy that the Central Bank will tomorrow publish a “Report on the Licensed Moneylending Industry”. The report will be available on the Central Bank’s website.

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