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Dáil Éireann Debate, Thursday - 26 November 2020

Thursday, 26 November 2020

Questions (73)

Thomas Gould

Question:

73. Deputy Thomas Gould asked the Minister for Finance if consideration will be given to incentives to encourage credit unions and post offices to lend to persons whose income has been temporarily affected by Covid-19 to ensure they are not forced to obtain loans from private moneylenders with extortionate interest rates. [39153/20]

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Oral answers (6 contributions)

Has the Minister given consideration to providing incentives to encourage credit unions and post offices to lend to people whose income has been temporarily reduced during the Covid-19 crisis so that they are not forced to obtain loans from private moneylenders who are charging exorbitant rates?

I thank Deputy Gould for raising this matter. I engage with the credit union movement regularly and since this terrible disease arrived on our shores, I have made a point of meeting the leaders of the main credit union organisations. I assure the Deputy that I will ask them to continue to be aware of the vulnerability of some of their customers and members at this difficult time and of the importance of treating them appropriately so that they can avoid having to resort to illegal moneylenders. I am also considering legislation to provide for the capping of interest rates for short-term loans. Having engaged with the credit unions and their leaders, I know that they are very much aware of the issue to which the Deputy refers. They are also aware of their duties to their vulnerable members. If the Deputy has any examples of specific changes he believes could be made, I would be very happy to hear about them and to respond.

I thank the Minister. Sinn Féin recently carried out a household survey and 94% of those who responded were concerned about their household income this year. A survey from last year showed that one in eight Irish parents goes into debt for Christmas, something that will be much worse this year because of the Covid-19 crisis. A financial broker quoted in the Irish Independent said that banks are not lending to those on the EWSS or PUP and are reluctant to lend to people who work for companies that have availed of the EWSS. The banks are not lending which means that people who are struggling to get finance are being driven into the hands of moneylenders. I ask the Minister to provide more details on what he intends to do about this in conjunction with the credit unions and post offices.

The very reason we introduced the EWSS and the PUP was to protect the incomes of all, but particularly the most vulnerable, as we deal with the ravages of this terrible disease. The biggest action the Government can take is to put in place direct measures to support the income of families at this most difficult time and we have done that. The PUP has made a decisive difference to those who need help the most. In terms of how we will deal with the issues raised by the Deputy regarding the post offices and credit unions, he knows that I cannot give a direction to our credit unions about how to lend. That is a matter for them but I will meet them again soon and will listen to any requests they have regarding how the needs of the most vulnerable can be looked after. We have a common, shared interest in this.

Moneylenders are currently distributing leaflets promoting loans. My father recently received one in the post. If one borrows €1,000 from one of these moneylenders, one will pay back €32 a week for a year, which means paying back €1,560. That is a scam and a disgrace. How can we allow this? The problem is that, if people cannot find another avenue to borrow money, they are driven to these moneylenders. Christmas is a special time and it will be even more special this year. All families want to do their best. Parents in particular want to do the best for their children and they are being driven into the hands of moneylenders. We in Sinn Féin are bringing forward legislation which aims to cap interest rates and to stop this type of moneylending because it is a scandal.

The Government will be bringing forward proposals in this regard. These will be effective and will deal with issues relating to the legality of moneylending and the interest rates charged. I represent and engage with constituents who are dealing with the matters to which the Deputy has referred. The Government is implementing a significant number of policies to protect those families as we come towards a Christmas that will be particularly special. What we have done with the pandemic unemployment payment, the nature of the employment wage subsidy scheme and even the decisions regarding the Christmas bonus have all been motivated by this Government's desire to do all it can to support people at a time when so many are vulnerable. As I have said, we will be bringing forward our own proposals on interest rates for short-term loans. We were conducting a survey and review in respect of this matter during 2020 but it was disrupted as a result of the Covid pandemic. I informed Cabinet on Tuesday morning that I would be bringing forward proposals in this regard, to which I hope to get agreement, in the near future.

Written Answers are published on the Oireachtas website.
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