Responding to the lasted Central Bank report on the licensed money lending industry, Sinn Féin Castlebar town councillor Therese Ruane has called for action to be taken to curb the interest rates charged by these services, which according to her are “making exorbitant profits on the backs of hard pressed families”.
She said this week, “It comes as no surprise to me, that the numbers of people using licensed moneylenders is spiralling. People and families are really struggling and many are turning to moneylenders as they see no other option. It may be a short term solution to put food on the table, pay school costs, pay for Christmas, but the reality is that for many, it the start of a never-ending spiral of debt to unscrupulous moneylenders. Just last week, I was contacted by someone who had used a moneylender as they waited for their social welfare claim to be processed and now are in a desperate situation unable to pay the interest and afraid to answer the door of their own home.”
She went on to say, "There are 40 licensed moneylenders operating in the State providing credit to an estimated 360,000 people. Incredibly, under existing legislation there is no cap on the interest charged by these licensed moneylenders. Some lenders charge an APR of up to 210 per cent. What politician or Government Minister could support such high charges? Fine Gael and Labour do, it appears. Last year Sinn Féin put a private members bill before the Dáil calling for a maximum 40 per cent APR rate for moneylenders and the Government parties voted against it. Indeed, Minister Hayes’ claimed that money lending is ‘an inherently expensive business’ and that ‘licensed moneylenders serve a high risk borrower segment’ misses the point. This is State sponsored robbery. Low income is the what drives people to resort to doorstep money lending. What people need is low cost solutions, not the exorbitant rates charged by unscrupulous moneylenders. I am appealing to people to look for help and not resort to moneylenders who prey on people's vulnerability.
She also said, “To date, this Government has shown their complete lack of empathy and compassion for people caught in the poverty and debt trap as they uphold a system that allows money lenders to charge exorbitant rates of interest of up to 210 per cent. It simply beggars belief that they would oppose the Sinn Féin private members bill to put a cap on this to protect ordinary people from exorbitant interest rates and a vicious cycle of debt. I am again calling on this Government to impose an interest rate cap of 40 per cent, as a minimum, on licensed moneylenders. This most recent Central Bank report shows that the numbers of people using moneylenders are spiralling. This is at crisis point and action is urgently needed to protect vulnerable families.”
