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Departmental Reports

Dáil Éireann Debate, Tuesday - 3 November 2020

Tuesday, 3 November 2020

Ceisteanna (417)

Pearse Doherty

Ceist:

417. Deputy Pearse Doherty asked the Minister for Finance the expected publication date of a report on capping the cost of licensed moneylenders and other regulatory matters in response to the public consultation which opened for submissions on 31 May 2019; and if he will make a statement on the matter. [32747/20]

Amharc ar fhreagra

Freagraí scríofa

The Department of Finance 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, proposed a number of policy changes in relation to the moneylending industry and are broadly in favour of introducing an interest rate restriction.

A number of potential policy proposals are being prepared in light of these submissions and I expect to receive a draft report setting out these proposals for my consideration in the coming months. Key to this process will be trying to balance improvements for borrowers with the potential for unintended consequences in terms of financial exclusion, if the supply of credit is reduced.

The Central Bank published Regulations on 8 June 2020 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% came 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’.

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