Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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190. To ask the Minister for Finance his plans to put a cap on the rate of APR that moneylending firms may charge for loans. [42877/14]

Michael Noonan (Limerick City, Fine Gael)
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My colleague, Minister of State Simon Harris T.D., said in the House on 9 October 2014 in a Topical Issues Debate, that the Government was concerned that the introduction of a cap on the interest rates that can be charged by moneylenders would not necessarily be in the interests of consumers or the wider financial system. 

The Central Bank is the competent authority with regard to licensed moneylending and is responsible for overseeing and regulating their activity.  Legislative provisions relating to moneylending are contained in the Consumer Credit Act 1995 (as amended).  It is an offence under that Act to engage in the business of moneylending without a licence granted by the Central Bank. I understand that there are 39 licensed moneylenders operating in Ireland at present.

The legislation does not provide for an interest rate cap for moneylenders.  The introduction of an interest rate ceiling may not achieve the objective of lowering the total cost of credit where, for example, the licensed moneylender chose instead to extend the duration of the loan. 

Lower interest rate ceilings could also result in excluding low income households from access to credit that have repayment capacity, even at the high rates charged by licensed moneylenders. I would have some concerns therefore about the imposition of an industry-wide interest rate cap without a detailed assessment of its impact on consumers.  Often the loans are for small amounts, are needed immediately by the customers and are made available and repaid at the home of the customer. The shorter the duration of the loan e.g. two weeks, the higher the Annual Percentage Rate of Charge (APRC) as the APRC is an annualised measure of the interest charged.  This service may impose extra costs on the moneylenders. The Deputy may also wish to note that, under section 47 of the Consumer Credit Act, a customer may apply to the Circuit Court for a declaration that the total cost of the credit provided is excessive.

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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191. To ask the Minister for Finance if the Central Bank of Ireland intends to inform moneylenders' customers of their legal rights, especially in advance of the Christmas season. [42878/14]

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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192. To ask the Minister for Finance the way moneylenders can justify that a majority of their customers, who are on welfare benefits, are making loan repayments at a weekly rate of €50 or more. [42879/14]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 191 and 192 together.

I have been advised by the Central Bank that consumers of licensed moneylending are protected by a range of provisions that moneylenders must adhere to, including but not limited to the Consumer Protection Code for Licensed Moneylenders, the European Communities (Consumer Credit Agreements) Regulations 2010 and the Consumer Credit Act 1995. These have detailed requirements specifying the information that a moneylender must provide to a consumer, prior to entering into a loan and also during the term of a loan.

Before entering into a loan a moneylender has a statutory duty under Regulation 11 of the European Communities (Consumer Credit Agreements Regulations) 2010 to assess the creditworthiness of a consumer, using sufficient information.  While the Central Bank acknowledges that the home collection credit industry may lend itself to building on-going relationships with consumers, the Central Bank has stated that such on-going relationships should not be solely relied upon when assessing consumers' creditworthiness.  The Central Bank expects that moneylenders must consider all existing loans and any arrears a consumer may have when assessing creditworthiness and must have strong documented evidence of the consumer's income, expenditure and ability to repay, before advancing each loan.

A moneylender must have a warning on the loan agreement highlighting that it is a high cost loan. Furthermore, the Central Bank maintains a register of all licensed moneylenders, which includes details of the maximum APRs and costs of credit that they are permitted to charge.

The Central Bank periodically undertakes research to inform the regulatory approach to the licensed moneylending industry in Ireland and to see how the firms are treating their customers.  The most recent research, which was conducted in 2013, included engagement with customers of moneylenders as well as moneylenders themselves.  The engagement with customers included structured telephone interviews with 500 customers and in-depth interviews with 8 customers.  In addition, the research agency consulted with key stakeholder bodies, who provided a valuable insight into the review and helped provide a balanced analysis of the industry.  The report was published in November 2013 and is available on the Central Bank's website at .

The Central Bank  recently advised the moneylending industry that assessment of the creditworthiness of consumers will be a future area of focus for the Bank and, where breaches are identified, the Bank will take steps to enforce compliance (including monetary or other penalties).  For additional information see the industry newsletter and the Central Banks communication on responsible lending on the Central bank's website at .

The Central Bank have also indicated that they will consider related media opportunities as part of its on-going media strategy.

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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193. To ask the Minister for Finance his views that it is justifiable that a lending company that is licensed by the Central Bank of Ireland is allowed to send marketing letters to current customers whose accounts are in arrears of more than €200. [42880/14]

Michael Noonan (Limerick City, Fine Gael)
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I assume from the context of the question that the Deputy is referring to a licensed moneylender. I have been advised by the Central Bank that the Consumer Protection Code for Licensed Moneylenders sets out specific requirements in respect of advertising by moneylenders. While the Code does not restrict the advertising of new credit facilities to existing customers in arrears, moneylenders are prevented from offering unsolicited pre-approved credit facilities. In addition, Regulation 11 of S.I. No. 281/2010 - European Communities (Consumer Credit Agreements) Regulations 2010  obliges creditors, before concluding a credit agreement, to assess the credit worthiness of the consumer on the basis of sufficient information, where appropriate obtained from the consumer and, where necessary, on the basis of a consultation of the relevant database.

I would advise the Deputy to report any possible breaches of the Code or the 2010 Regulations to the Central Bank.

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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194. To ask the Minister for Finance if he will ensure that all moneylending companies that use so-called self-employed agents should be made to make immediate disclosure to the Revenue Commissioners, providing full details of the agent, that is, PPS number, name, address and start date. [42881/14]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank has advised me that section 97 (1) of the Consumer Credit Act, 1995 (CCA) specifically envisages that a moneylender can appoint agents to act on its behalf.  The agent is acting under the umbrella of the moneylender's licence, and as such is subject to the same compliance obligations as the licence holder, i.e. the Consumer Protection Code for Licensed Moneylenders (ML Code), the European Communities (Consumer Credit Agreements) Regulations 2010 and the CCA. Therefore, where the Central Bank becomes aware of potential non-compliance with regulatory requirements by an agent of a licensed moneylender, this would be treated as non-compliance by the licensed moneylender.

I am advised by the Revenue Commissioners that Sections 889 and 894 Taxes Consolidation Act 1997 require every person (which includes an individual, partnership or company), who in the course of a trade or business makes a payment to another person, to make a return of such a payment (or payments) to Revenue.

If the Deputy has concerns that either:

- some moneylenders may not be complying with their obligation to notify the Revenue Commissioners of the commissions paid to their agents; or

- some agents of moneylenders may not be fulfilling fully their tax obligations,

and he has information in that regard, he may pass it to my officials who will ensure that it is sent to the Revenue Commissioners or he may contact Revenue directly.

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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195. To ask the Minister for Finance the reason agents of moneylending companies are not vetted by the authorities. [42882/14]

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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197. To ask the Minister for Finance if the Central Bank of Ireland offers audit training programmes for agents of moneylending companies. [42884/14]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 195 and 197 together.

The Central Bank has advised me that section 97 (1) of the Consumer Credit Act, 1995 (CCA) specifically envisages that a moneylender can appoint agents to act on its behalf.  The agent is acting under the umbrella of the moneylender's licence, and as such is subject to the same compliance obligations as the licence holder, i.e. the (ML Code), the European Communities (Consumer Credit Agreements) Regulations 2010 and the CCA. Therefore, where the Central Bank becomes aware of potential non-compliance with regulatory requirements by an agent of a licensed moneylender, this would be treated as non-compliance by the licensed moneylender.

The ML Code makes it clear that agents of moneylenders are within the scope of the Code. The Scope section provides as follows:

"Throughout this text, reference to a 'moneylender' refers to a moneylender licensed under the Act, itsofficers,employeesandpersonswho engage in the business of moneylending on behalf of the moneylender.' 

Furthermore, under the Central Bank's Fitness & Probity Regime all licensed moneylenders are responsible for ensuring that individuals performing Controlled Functions (CFs) meet the Fitness & Probity Standards, both prior to appointment and on an on-going basis. Agents of licensed moneylenders perform CFs and, accordingly, the licensed moneylender must ensure that it carries out due diligence to assess its appointed agents' fitness and probity. Moneylenders are responsible for ensuring that all individuals performing a CF meet the required Fitness & Probity Standards.

The Central Bank provides compliance assistance to licensed moneylenders through its industry newsletter and other feedback and guidance to regulated firms which are available on the Central Bank's website at .

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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196. To ask the Minister for Finance if the Central Bank of Ireland has conducted a full audit on all moneylending companies to check on illegal or bad practices. [42883/14]

Michael Noonan (Limerick City, Fine Gael)
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I have been advised by the Central Bank that in relation to licensed moneylenders, compliance with supervisory and legislative requirements is monitored on an ongoing basis through a robust annual licensing process, advertising and market intelligence monitoring and themed and institution-specific inspections. 

Issues identified are addressed with the relevant firms. Failures to adhere to the supervisory and legislative requirements are dealt with appropriately. This may include proceedings under the Bank's Administrative Sanctions Procedures. The Central Bank has no power or role in the regulation of illegal moneylending and reports any such suspicions to the Garda Síochána.