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Consumer Credit (Amendment) Bill 2018: Second Stage [Private Members] (Continued)

Wednesday, 12 December 2018

Dáil Éireann Debate
Vol. 976 No. 5

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(Speaker Continuing)

[Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty] I am not sure whether Fianna Fáil is supporting the legislation. I do not know if Deputy Michael McGrath was here when I acknowledged that it supported this identical legislation in 2012 and I assume it will do so again tonight. There are things that need to be done as we progress with this Bill. Let us get on with it. I will not be accepting any further delay. We have waited long enough. The poorest families in the State have waited long enough. They are living week by week and many of them fear the knock on the door. Let us take action and ensure that this is the last Christmas that moneylenders will be licensed to charge these outrageous rates of 187% which, coupled with collection charges, increases to 287%.

Deputy Jonathan O'Brien: Information on Jonathan O'Brien Zoom on Jonathan O'Brien As my colleague, Deputy Pearse Doherty said, we debated this legislation six years ago when we introduced similar legislation to introduce interest rate restrictions. At the time the Government turned down the legislation. I remember contributing to that debate at the time. One of the reasons the Government gave was the need to get more information on the consequences of bringing in an interest rate cap. We were told that there would be several unintended consequences which could flow from that. It would have to be examined more carefully and there was a commitment to do so.

We are back six years later debating the legislation again and we are now being asked by the Government to postpone the reading of the legislation on Second Stage for a further 12 months. The Government has had six years to examine all of this. It is now looking for another 12 months. In its amendment to the motion the Government states that it needs time to examine "University College Cork's report, Interest Rate Restrictions on Credit for Low-income Borrowers, which was launched by the Social Finance Foundation (SFF)". That report was launched 12 months ago. It has been sitting in the Department of Finance for 12 months. If the Minister of State at the Department of Finance, Deputy D'Arcy, has not studied it by now I do not have any confidence that he will study it within the next 12 months.

I agree with my colleague that this is nothing but a fob. The Government has no interest in addressing this. It has not done it in six years and is not going to do it in another 12 months. It is a comprehensive report which I read this afternoon. It is not a very long report. It does not take 12 months to read and act upon. It refers to the issues which the Government highlighted six years ago that needed to be addressed, for instance, the unintended impacts of an interest rate regulation. It goes into detail in the report on that. It says there are eight unintended consequences which could flow from an interest rate cap. It even ranks them for the Minister of State: two are ranked as high impact, four are medium and two are low. It goes further. It tells the Minister of State how to address those unintended consequences to mitigate them or to eradicate them totally. It also makes eight recommendations. The report goes beyond that. It considers the reasons people engage with legal moneylenders, why they do not consider other credit sources, such as the credit union and various other low income borrowing sources, and it goes into great detail on that around the convenience of these moneylenders and the doorstepping – they arrive at the door and collect the money weekly and that is convenient. It even asks if they did not exist what would those individuals who currently access legal moneylenders do in substitution. It states 75% of them would go to their credit union or other similar credit providers.

The report has been there for the past 12 months. I suggest that somebody in the Department reads it, takes on board the recommendations and gets on with this legislation. For the Government to sit on its hands for the next 12 months is not acceptable. I have no doubt but that in 12 months' time the Government will not act on this. I hope that Fianna Fáil and other parties reject the Government amendment and that the Bill is read a Second Time. If it is read a Second Time it should not engage in the carry on about money messages and try to hold it up on Committee Stage because that is not in the interests of the people that this Bill is trying to address. It is time for the Minister of State to get the finger out and take action. Six years have passed. We are not waiting another 12 months.

Deputy Denise Mitchell: Information on Denise Mitchell Zoom on Denise Mitchell I welcome this Bill presented by Deputy Pearse Doherty. As we approach Christmas time, many families across the State are turning to these moneylending companies in order to ensure that their families, and in particular their children, have a special Christmas. This, however, is not something that is unique to the Christmas period. If the car breaks down or the washing machine needs to be replaced many are turning to moneylenders because the high cost of living means many families are living from pay cheque to pay cheque. Unfortunately, the huge interest rates charged by these organisations are driving people further and further into debt. I note that one moneylender based in south Dublin was given a moneylender's licence by the Central Bank in July that allows it to charge 287.72% interest, including collection charges. That is, quite frankly, disgusting.

These companies, charging these disgraceful interest rates, are leeches. They are preying on the most vulnerable in society to line their own pockets. Who are the ones who get stuck in this cycle of debt? The research shows that it is mainly women from low income households and lone parents. Once again, working class women are bearing the brunt of this Government's inaction. There are plenty of other countries in the EU which have placed caps on moneylenders' rates. In fact, we are out of step when it comes to protecting the consumer here. We are one of only seven EU states that have allowed moneylenders to charge whatever they want with no cap.

I hope Deputies from across this House will support this Bill and ensure that some controls are placed on these organisations which make profits from people in desperate situations.

Deputy Aengus Ó Snodaigh: Information on Aengus Ó Snodaigh Zoom on Aengus Ó Snodaigh I have dealt with many cases of people in severe financial stress, especially at times similar to Christmas, but often because of Government policy at other times, for example to pay for funerals. They have resorted to legal and illegal moneylenders and have then, because there is somebody calling at the door, availed of another loan and another and they have ended up in a cycle of debt which they do not seem to be able to get out of. This happens in working class communities in particular but anybody who is dependent either on very low pay or social welfare ends up forgoing food and heating and their kids do not have proper clothes and the like. That is the background to this and the type of people in the main who avail of the scandal that is supposedly consumer credit. These are people who provide loans at an exorbitant rate.

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