30/07/2019

Calls For Cap & Warnings About High Loan Rates

A Sinn Fein TD has called for a cap on moneylending interest rates amid demands for high-cost loan warnings to be displayed on all advertising.

It comes as a Department of Finance consultation on the matter draws to a close.

Sinn Féin spokesperson on Finance Pearse Doherty said there is an urgent need to cap the rates charged by licensed lenders, as many citizens have no choice but to apply for a loan. An estimated 33,000 people have used money lenders in Ireland.

Teachta Doherty said: "Financial challenges - particular at this time of year with increasing back to school costs - means that that many families are often forced to resort to borrowing money to make ends meet; from banks, from friends, from family members or from Credit Unions.

"For some people, that is not an option and they must resort to borrowing money from moneylenders and loan sharks, who in many cases are unlicensed and charge punitive and quite frankly disgusting interest rates. Currently, even licensed moneylenders are permitted to charge 187% interest by the Central Bank and when collection charges are added in that rises to 287% APR.

"This affects an estimated 330,000 people who are forced to borrow from moneylenders - 7% of the entire population of the State."

A Bill introduced to cap interest rates at 36% was previously passed by the Dáil but failed to make it into law.

"It is high time the government acted on this issue and moved urgently to cap the interest rates that licensed moneylenders are permitted to charge," Deputy Doherty added. "With the necessary political will, there is no reason why legislation can't be place to ensure this Christmas is a moneylender free one for many families."

Meanwhile, the Society of St Vincent de Paul wants to see all loan companies display a tobacco-style warning on their merchandise.

Moneylenders must provide information about the cost of loans to their customers, typically in the lending agreement, but it is not required in advertisements.

In a submission to the consultation, the society said that "Warning: This is a high cost loan" should be on all moneylending advertisements and literature.

It said the warning should also point out that alternatives to high cost loan offerings may be available and that people should check their options before borrowing.



(JG/CM)

Related Irish News Stories
Click here for the latest headlines.

26 November 2015
Mortgage Loan Scheme Needs To Be 'Revamped' - FF
A loan scheme designed for first time buyers needs to be "revamped", Fianna Fáil spokesperson on finance Michael McGrath has said. Deputy McGrath made the call after figures revealed that not a single loan has been issued under the scheme so far in 2015.
06 August 2015
Finance Minister Accused Of Failing To Assist NAMA Inquiry
Sinn Féin leader, Gerry Adams TD, has hit out at Minister for Finance Michael Noonan, over his failure to NAMA cooperates with an inquiry into the sale of its northern loan portfolio. On Wednesday, the Stormont Finance Committee agreed in principle to use its powers of compellability to get officials at NAMA to attend the inquiry.
27 February 2013
Ulster Bank Admit Mortgage Error
Ulster Bank has issued an apology after 1,000 customers were put on the incorrect mortgage. Mortgage customers had been given the option to pay only the interest and not the capitol on their loans for between two and five years.
29 June 2012
Collins Urges Minister To Expand Micro Finance Loan Fund
Speaking in the Dáil on the Micro Finance Loan Fund Bill 2012, Fine Gael Cork North West Deputy, Áine Collins, welcomed the provisions of the Bill which she said will help small and medium businesses to get much needed access to funds.
18 September 2008
Proposals May Help Low Income Home Buyers
Home buyers on low incomes could soon receive help from the Government for their house-hunting. The Environment Minister John Gormley has been given the go-ahead to draw up an expanded system of local authority loans for home buyers in the lower tax brackets.