Fiona O'Loughlin
Question:152. Deputy Fiona O'Loughlin asked the Minister for Finance the number of illegal moneylenders that have been prosecuted in the past ten years; and if he will make a statement on the matter. [50637/18]
View answerTuesday, 4 December 2018
Questions (152, 154, 155, 156)
Fiona O'Loughlin
Question:154. Deputy Fiona O'Loughlin asked the Minister for Finance the number of authorised moneylenders; the number in each of the years 2014 to 2017; the name of each and the counties in which they operate; and if he will make a statement on the matter. [50640/18]
View answerFiona O'Loughlin
Question:155. Deputy Fiona O'Loughlin asked the Minister for Finance his plans to legislate to place a cap on the rates that can be charged by moneylenders; the way in which to ascertain the interest rates they charge; and if he will make a statement on the matter. [50641/18]
View answer
Michael McGrath
Question:156. Deputy Michael McGrath asked the Minister for Finance the number of cases in which a licensed moneylender was found to be charging an APR in excess of the associated maximum APR in the Central Bank's moneylender register; if the maximum APR in that register places a restriction on the amount the moneylender can charge by way of interest or if it is only indicative in nature; and if he will make a statement on the matter. [50658/18]
View answerWritten answers
I propose to take Questions Nos. 152 and 154 to 156, inclusive, together.
The Central Bank regulates the licensed moneylender sector. It is, of course, a criminal offence for an unauthorised firm/person to provide financial services in Ireland that would require an authorisation under the relevant legislation which the Central Bank is the responsible body for enforcing.
The Central Bank has no power or regulatory role in respect of illegal moneylenders. Illegal moneylenders fall within the remit of An Garda Síochána. The Central Bank is statutorily required to report any suspicions of illegal moneylending to An Garda Síochána and does so when it becomes aware of suspected cases of illegal moneylending. Members of the public and licensed moneylenders are encouraged to report any suspicions of illegal moneylending to An Garda Síochána.
As at 31 December 2014 there were 38 moneylenders licensed by the Central Bank.
As at 31 December 2015 there were 39 moneylenders licensed by the Central Bank.
As at 31 December 2016 there were 39 moneylenders licensed by the Central Bank.
As at 31 December 2017 there were 40 moneylenders licensed by the Central Bank.
As at 29 November 2018 there are 39 moneylenders licensed by the Central Bank.
The Central Bank’s public register of moneylenders sets out the District Court districts in which each licensed moneylender is permitted to operate. Currently, 28 moneylenders are permitted to operate in all districts. S.I. 172/2013 (available on www.irishstatutebook.ie), sets out the up to date list of District Court districts and their related areas.
Each moneylender’s licence (which can be found on the Central Bank’s Register of Moneylenders, available at the following link: http://registers.centralbank.ie/LenderSearchResultsPage.aspx?searchEntity=MoneyLender&searchType=Name&searchText=®isters=14&lenderType=MoneyLenders&court=All&aprMin=0&aprMax=0&costofcreditMin=0&costofcreditMax=0&termMin=0&termMax=0) includes details of the duration, maximum APR, maximum cost of credit and the collection charge (if any) of the loans which can be offered by a licensed moneylender. Licensed moneylenders are prohibited from applying additional charges (other than a collection charge) to a moneylending agreement and are also prohibited from applying any additional charges in the event of a default in the payments due under the agreement (i.e., the total amount repayable by a consumer is limited to the amount specified in the moneylending agreement).
The Consumer Credit Act 1995, the legislation under which moneylenders are licensed, does not provide for an APR/interest rate cap. Nor does the European Communities (Consumer Credit Agreements) Regulations 2010. Therefore, the Central Bank has no statutory power to impose a market wide cap on rates. Any legislative proposals in this regard would have to be careful to achieve an overall reduction in the cost of credit and ensure that it did not have unintended consequences in terms of financial exclusion.
The legislation provides that the Central Bank can refuse to grant a licence to a moneylender if it is of the opinion that the cost of credit to be charged is excessive. Since the Central Bank assumed responsibility for the licensed moneylending sector in 2003, it has not permitted an increase to the maximum APR charged in the sector. During the Central Bank’s engagements with new or potential applicants, it examines, on a case-by-case basis, if the proposed costs of credit are excessive and it has successfully challenged firms in this regard. Nor has the Bank licensed any moneylender to provide the ‘pay-day loan’ services that exist in other jurisdictions such as the UK and the Bank will continue to pursue this policy.
The Central Bank has stated its view publicly that the introduction of an interest rate ceiling may not achieve the objective of lowering the total cost of credit, for example if the licensed moneylender chose instead to extend the duration of the loan. Any legislative proposals in this regard would therefore have to be careful to achieve an overall reduction in the cost of credit. Lower interest rate ceilings could be ineffective and counterproductive in this regard and may result in excluding low income households that have repayment capacity from accessing such credit, even at the high rates charged by licensed moneylenders.