As this is the last sitting before the Christmas recess, I will begin by wishing the Ceann Comhairle and all the staff of the Houses of the Oireachtas a very happy Christmas. From ushers to staff in the Bills Office, the canteen and everywhere else throughout the complex, they do incredible work and deserve our thanks, particularly at this challenging time. I also wish my colleagues in the Dáil and the Irish people a very peaceful Christmas. While we must remain vigilant to the threat of Covid-19 to protect ourselves, our families, our communities and one another, this Christmas provides us some relief and comfort in what has been a difficult year. Guím Nollaig Shona agus athbhliain faoi mhaise do na Teachtaí uilig.
Unfortunately, Christmas can be a time of much worry for some. Household debt is a problem for many workers and families. Due to Covid-19, tens of thousands of people have lost their jobs and many families are now facing their most difficult Christmas in years. The choices facing them are stark. How can they make Christmas special for their families and still pay the bills? Do they buy presents or heat their homes?
The Society of St. Vincent de Paul has described this year’s annual appeal as one of the most difficult in its 176-year history in Ireland. Difficulties for some present opportunities for others and there are always those who are ready to take advantage, provided they can. The Society of St. Vincent de Paul and others have warned about the threat posed this Christmas by licensed moneylenders and the extortionate interest rates they charge. There are an estimated 330,000 customers of moneylenders, with an average loan size of €556. For many in financial difficulty, moneylenders provide an easy line of credit but at a high cost. Licensed moneylenders are permitted by the Government to charge an annual percentage rate, APR, of 187%. That increases to 288% when permitted collection charges are included. The Citizens Information Board has stated that this extortionate level of interest leaves many borrowers unable to pay for life’s essentials and creates a vicious cycle of repeat borrowing. The majority of these borrowers are women; many of them are lone parents.
On 6 December 2018, I introduced the Consumer Credit (Amendment) Bill. It would introduce a statutory cap on the interest that moneylenders can charge. It has passed Second Stage and will be considered by the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach next month in oral hearings as part of the next Stage. It has already received submissions from interested parties.
Ireland is an outlier when it comes to the extortionate interest rates these moneylenders are permitted to charge. Interest rate caps are applied in 21 countries across the EU, including Germany, France and Italy. Many of these caps were introduced because their countries believed that it was morally unjustifiable to charge ultra-high interest rates, especially against the most vulnerable and those least able to repay. Germany described such rates as lacking moral legitimacy. Finland described them as unconscionable. In Ireland, however, anything goes and the sky is the limit. That is not acceptable and should not be tolerated.
A statutory cap on the interest rates that moneylenders can charge is supported by the Social Finance Foundation, the Citizens Information Board, the Money Advice & Budgeting Service, MABS, the credit union movement and charities such as the Society of St. Vincent de Paul.
Will the Government commit to working with the Opposition on this legislation? Can we see a new dawn in respect of moneylenders and the interest rates they charge? We have legislation that has passed Second Stage in this House and is before a committee. It can be improved on and I am open to suggestions. A cap needs to placed. Let us ensure that this is the last Christmas that moneylenders can charge up to 187% APR.