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Written Answers - Financial Services Regulation

Thursday, 9 February 2012

Dáil Éireann Debate
Vol. 755 No. 1

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 63.  Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath  asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan  the number of registered moneylenders here at the end of 2011; his views on the extent of legislative protection for consumers availing of the services of moneylenders; and if he will make a statement on the matter. [7450/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I have been advised by the Central Bank that the number of registered moneylenders with the Central Bank at the end of 2011 was 48. Any firm wishing to operate in the State as a moneylender has to apply to the Central Bank for a moneylender’s licence and must have their licence renewed annually. Section 93 of the Consumer Credit Act 1995 (as amended) sets out the Central Bank’s powers in relation to the grant or refusal of a moneylender’s licence. The appropriate money lending application form (new or renewal) must be completed and returned to the Central Bank with a number of items, for review and consideration.

In addition to the licensing system, the Central Bank has in place a Consumer Protection Code for Licensed Moneylenders (the Code). The Central Bank has power to impose sanctions on moneylenders for a contravention of the Code. The Code sets out the General Principles with which a moneylender must comply. For example, a moneylender must act honestly and professionally, with due skill, care and diligence in the best interest of consumers. The Code also places requirements on moneylenders in relation to the provision of information to the consumer, preservation of a consumer’s rights, knowing the consumer, suitability, unsolicited contact (cold calling), disclosure, errors, handling complaints, consumer records, unsolicited credit facilities, arrears and guarantees, debt collection and the contents and presentation of advertisements.

The European Communities (Consumer Credit Agreements) Regulations 2010 provide consumer protection measures for loans ranging from €200 up to €75,000. These Regulations apply to money lenders.

The Central Bank monitors compliance with the Code on an ongoing basis through themed inspections, mystery shopping, consumer intelligence and complaints from the Financial Services Ombudsman.

On 18 February 2011, the Central Bank published the results of a themed inspection of licensed moneylenders. Inspections were conducted in 11 of the 46 licensed moneylenders currently operating in Ireland. The inspections focused on whether consumers were being charged in accordance with the moneylenders’ authorised APRs (Annual Percentage Rates) and costs of credit as set out in the moneylenders’ licences. It also examined whether firms had their licences on display and if they indicated the high-cost nature of loans on loan documentation issued to consumers, as required by the Code. Overall the inspections found a high level of compliance with the requirements and that consumers were being charged in accordance with the moneylenders’ authorised APRs and costs of credit.

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