A cap on the interest that can be charged by moneylenders in Ireland must be introduced by the Central Bank in order to stop them “preying on the poor”.
This is the view of Labour Galway senator Lorraine Higgins who is calling on the Governor of the Central Bank to introduce such a reform. She also requested he “speak to our bailed out banks” to request they provide a small loan product to compete with moneylenders.
Her call follows news that the number of people taking out high-cost loans from licensed moneylenders has increased by 20 per cent since 2007, to 360,000.
There are almost 50 money lenders registered by the Central Bank in the State. However Sen Higgins estimates that many unregistered moneylenders operate under the radar.
“Moneylenders lend small amounts of money for short periods at a really high interest rate,” she said, and accused them of profiting by lending to people “they know cannot pay on time”.
Many charities, including the Saint Vincent de Paul have expressed concern over the way lenders target people at certain times of the year. “People must be warned not to fall into clutches of these moneylenders,” said Sen Higgins, “who are quite simply preying on the poor.”
