asked the Minister for Justice if in view of the unsatisfactory nature of the present law in relation to moneylending he will introduce amending legislation; and if he will make a statement on the matter.
Written Answers. - Moneylending Legislation.
66.
The law in relation to moneylending is contained in the Moneylenders Acts, 1900 and 1933.
I am aware that views have been expressed to the effect that this legislation is unsatisfactory and that allegations of irregularities by moneylenders have been made by the media in recent years.
I am informed by the Garda authorities that the gardaí pursue actively all alleged breaches of the law in relation to moneylenders. In keeping with this policy all divisional officers had investigations carried out following the allegations of irregularities by moneylenders which were made in the media in November and December 1985 and subsequently. Some evidence of irregularities was found to exist in the area of Cork, Galway, Waterford and Wexford.
This, however, must be assessed in the following context. First, a difficulty nearly always encountered by the gardaí in investigating the allegations against moneylenders is that in many cases the persons making the allegations or the borrowers in question are either unable or unwilling to give information.
Second — and this is of central importance — most of what may be described as irregularities in the matter of moneylending are not criminal offences. In many important instances the Acts do not create offences at all and, therefore, do not provide for a criminal sanction but only for a restriction on the civil right of the moneylender to recover a debt in the courts. Accordingly, the remedy provided by law does not rest with the gardaí — even when they get full co-operation from the borrower — but with the borrower himself if the moneylender seeks to bring civil proceedings against him.
A case in point is the matter of interest and related charges. There is no power vested in the Garda to prosecute for excessive charges. Charging more than 39 per cent is not a criminal offence. The figure is mentioned in the 1933 Act in the context of a provision which allows a court, in proceedings brought by a moneylender for the recovery of money lent, to re-open the transaction and give equitable relief if the transaction is harsh and unconscionable. The court must conclusively assume that it is such a transaction if the interest exceeds 39 per cent simple interest but can give relief even where the interest is less. Charging more than that rate of interest could also be significant in the context of applications for renewal of certificates of fitness.
The resumé I have given of the situation does not amount to saying that I would favour changes in the Moneylending Acts — either in relation to interest rates or in relation to remedies. I have serious doubts that that would be a satisfactory solution. However, I propose to keep the matter under review and I am prepared to examine any suggestions for improvements by interested groups.
Having regard to the essential character of a moneylending transaction it seems to me that there is much to be said for dealing with the issue in the context of consumer protection and-or credit control as is, for instance, the case in Britain. That aspect has recently been the subject of consideration in the Department of Industry and Commerce and I intend to pursue it further.