Credit union report highlights need for moneylending regulations - John Paul Phelan

The ‘What’s Left’ tracker report from the Irish League of Credit Unions highlights the need for moneylenders to be regulated, according to Fine Gael TD, John Paul Phelan.

The ‘What’s Left’ tracker report from the Irish League of Credit Unions highlights the need for moneylenders to be regulated, according to Fine Gael TD, John Paul Phelan.

The report found that 40% of those surveyed are borrowing to pay household bills, with 10% turning to moneylenders for extra cash.

“This report highlights a worrying trend, where more and more people are turning to moneylenders to help them get by. Many of those who go to moneylenders may not have a bank account, and feel like they have no other option to get some extra cash. But the consequences can be very serious.

“There are now more than 40 licenced moneylenders operating here, with countless others operating illegally. They charge interest rates of up to 190%, leaving it almost impossible for people to successfully keep up with repayments.

“These unscrupulous lenders operate a door-to-door policy for repayments, which can lead to a feeling of intimidation. This approach means borrowers get themselves into even more debt, and the moneylender is the only one to benefit.

“I would like two things to happen here; firstly, Credit Unions need to look at their own lending practices. The Credit Union has traditionally been the people’s bank, and it must continue to carry out this function. I am frequently contacted by people in my constituency who have trouble to get even a small loan from any traditional sources, and this needs to be addressed.

“Secondly, I am calling on the Central Bank to urgently look at the need for regulation of moneylenders. They are currently required to display their high interest rates, under the provisions of the Consumer Protection Code for Licensed Moneylenders. But there is no cap on the interest rates that can be charged. This effectively means they are charging what they like.

“I intend to raise this issue with the Minister for Finance, Michael Noonan. Moneylenders cannot be allowed to operate in a vacuum where they essentially make up their own rules,” Deputy Phelan said. His comments come in the wake of efforts by the Kilkenny TD to also tighten up the booming ‘Cash for Gold’ industry.