Written answers

Thursday, 14 February 2019

Department of Finance

Financial Services Regulation

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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57. To ask the Minister for Finance his plans to regulate the bad credit moneylending industry; and if he will make a statement on the matter. [50518/18]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I assume that the Deputy intends to refer to licensed moneylenders who lend to people with bad credit histories. Illegal moneylenders operating without licences are a matter for An Garda Síochána.

As the Deputy may be aware, Deputy Pearse Doherty initiated a Private Member's Bill which would cap the APR which moneylenders can charge at 36 per cent. As indicated during second stage of that Bill, my Department is considering our response to the report prepared for Social Finance Foundation on interest rate restrictions by the Centre for Co-operative Studies of University College Cork. While this report recommended that usurious interest rates be prohibited, this recommendation was conditional upon the credit union movement being able to serve the community which is currently serviced by moneylending firms, subject to adherence to prudent credit guidelines. A major policy concern is how to ensure that credit continues to be available to this community in the event that supply of credit by moneylenders is reduced because of an interest rate cap.

Furthermore, the Central Bank published a Consultation Paper () in March 2018 on its review of the Consumer Protection Code for Licensed Moneylenders proposing new measures which would enhance the framework of protections for customers of licensed moneylenders. I understand that it expects to finalise and publish Regulations under Section 48 of the Central Bank (Supervision and Enforcement) Act 2013, to replace this Code in 2019.

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