asked the Minister for Justice when the last official investigation by his Department into the operation of moneylending in Ireland took place; and if he will consider an immediate investigation into the present rates of interest charged and the present policy in relation to moneylending with a view to updating the Act in this regard.
Ceisteanna—Questions. Oral Answers. - Moneylending Investigation.
79.
Mr. R. Burke
The only official investigation my Department are aware of was a limited investigation in 1943, when there were consultations with the Garda, District Justices and others, including a representative of the St. Vincent de Paul Society.
As the law stands, a money lender cannot enforce an interest rate in excess of 39 per cent. The rate of 39 per cent was decided on by a Committee of the Dáil in the context of the Bill that became the Moneylenders Act, 1933, and the prevailing interest rate for bank overdrafts at that time was only 5 per cent as against the present rate of 14 per cent.
I would assume that, in opting for what by the standards of the day must have seemed a very high rate, the Dáil were taking account of such factors as the high risk in unsecured loans and —perhaps even more relevant—the fact that while the rate considered as a percentage per annum is very high, it may often relate to only a small loan for a short period so that the sum actually involved in the interest-payment is small and may be largely taken up in clerical and other overheads.
The problem, therefore, is this: if licensed moneylending is subjected to restrictions of such severity that it no longer remains economic to make short-term small or smallish loans, one foreseeable and even probable consequence may be to drive the business underground and to create a worse situation.
In those circumstances I would welcome the considered views of any community organisations or other groups who have experience of problems in this area and who would also be aware of the possible pitfalls in any new restrictions. It so happens that it will become necessary, fairly shortly, to make what I regard as a minor amendment—relating to a citizenship provision—in the 1933 Act to comply with our EEC obligations and, in that context, any other amendment that seemed desirable could also be conveniently introduced.
I would ask that any interested organisation should send in their views, preferably in writing, within the next six weeks or so.
Can the Minister say what the current rate of interest is?
Mr. R. Burke
I am not in a position to answer that. All I can say is that the maximum rate is 39 per cent. I will ask the Minister to send that information to the Deputy.
The point I am trying to make is that 39 per cent is an absolute scandal. I appreciate the Minister's point that moneylending would go underground if it were subjected to too severe restriction but, sociologically, I am sure the Minister will agree that a rate of 39 per cent is disgraceful. He asked for the views of individuals. I shall certainly let him have my views and I will strongly recommend that he seeks out the views of the credit unions which are doing a wonderful job of work in the different areas in which they operate.
In a review of moneylending will the Minister also tackle illegal moneylenders?
Mr. R. Burke
The Deputy will appreciate that the amendment proposed is in consequence of an EEC Directive and relates to citizenship rights rather than to moneylending. The Minister has indicated that he will welcome the considered views of community organisations and other groups, including presumably those of Deputies and Senators, and I suggest that these should make their views known to him.
Will the Minister write to these groups and individuals or will he put a notice in the papers asking them to write to him?
Mr. R. Burke
I take it the publication of the answer to this question could be regarded as an indication to interested bodies to send in their views.
(Dublin Central): Could the Minister give any indication of the number of licences issued at the moment to moneylenders?
Mr. R. Burke
On the last available date the figure was upwards of 100.
(Dublin Central): Has the Minister any knowledge of any breach of the permitted rate of 39 per cent?
Mr. R. Burke
Charging over 39 per cent is not a criminal offence.
(Dublin Central): Is it not?
Mr. R. Burke
No. It is not a criminal offence to charge over 39 per cent.
Does the Minister——
Please, Deputy Andrews.
Just one final supplementary.
I think I gave Deputies a great deal of latitude.
Indeed, you did. You have been very good today. The Minister said this question may be published. If it is not published will he insert an advertisement asking people to submit their views? If it does not appear in the newspapers this evening or tomorrow how will he bring it to the attention of people so that they can submit their views?
Mr. R. Burke
The Minister will read this discussion and, if it does not get publicity, I am sure he will take other steps to ensure that it is published. I hope it will get publicity. May I say that 48 per cent is the rate in Britain?