Dáil Éireann Debate, Tuesday - 23 June 2020
81. Deputy Seán Crowe asked the Minister for Finance if he is considering plans to address the high interest rates some legal moneylenders charge; and if there are plans to introduce a cap on excessively high interest rates. [12589/20]
Amharc ar fhreagraThe issue of moneylender interest rates is currently being examined by the Department of Finance. The Department undertook a public consultation in 2019 seeking views on capping the cost of licensed moneylenders and other regulatory matters in relation to moneylending. The submissions received have proposed a number of policy changes in relation to the moneylending industry and are broadly in favour of introducing an interest rate restriction. Analysis of these submissions is being used in framing of policy proposals that will be completed by my Department shortly. Any legislative proposals in this regard would have to be carefully considered 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 Central Bank recently published (8 June 2020) new Regulations to strengthen protections for consumers of licensed moneylending services and to enhance professional standards in the sector. The regulations include a requirement on Moneylenders to include prominent, high cost warnings in all advertisements for moneylending loans with an Annual Percentage Rate (APR) over 23 per cent. The warning must also prompt consumers to consider alternatives. The regulations will come into effect on 1 January 2021. However, recognising the financial effects of COVID-19 on consumers, the ‘high-cost warning’ requirement in respect of advertisements for moneylending loans with an APR in excess of 23% will come into effect on 1 September 2020.
The Money Advice and Budgeting Service (MABS) is available to anyone experiencing problems with budgeting and debt. Furthermore, I would encourage anyone who is in receipt of a social welfare payment to explore the option of a Personal Micro Credit Scheme Loan. These loans are branded as the ‘It Makes Sense Loan’ and are offered through the credit union network. 108 credit unions and 173 sub-offices (281 locations in total) are now in a position to offer the ‘It Makes Sense Loan’.
