Dáil Éireann Debate, Wednesday - 18 September 2013
219. Deputy Seán Kyne asked 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]
View answerThe 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.
