Sinn Féin spokesperson on Finance Pearse Doherty TD has made a submission on behalf of Sinn Féin to the Finance Committee on its legislation to cap the interest rate charged by moneylenders.
This comes as the Finance Committee concludes its pre-legislative scrutiny of the legislation, with the Irish League of Credit Unions, Money Advice and Budgeting Service, and FLAC coming before the Committee this afternoon to give their evidence and views on the Bill.
In its submission, Sinn Féin has proposed an amendment to the Bill that would put:
- Cap the cost of credit moneylenders could charge at no more than three times the market average,
- Require the Central Bank to make regulations governing the cap, and
- Enable the Minister for Finance to further restrict the interest rates that moneylenders can charge as appropriate.
Speaking today, Teachta Doherty said:
“Today the Irish League of Credit Unions, MABS and FLAC will come before the Finance Committee to consider my legislation to cap the interest rates that moneylenders can charge.
“This is the final session of pre-legislative scrutiny before the Committee decides whether to progress the Bill to Committee Stage.
“At present, the Government allows moneylenders to charge interest of 187 percent (288 percent when collection charges are included).
“These ultra-high interest rates are unethical, immoral and trap vulnerable borrowers into vicious cycles of debt.
“In 2018, 21 of 28 EU countries had some form of interest rate restriction in place to protect low-income and vulnerable borrowers.
“Irish borrowers are given no such protections – an indictment of the Government and its attitude towards financial inclusion.
“We must cap the cost of credit charged by moneylenders.
“Yesterday I made a submission on behalf of Sinn Féin to amend and strengthen this legislation, taking into account the views and expertise of key stakeholders.
“The amendment would move away from an absolute cap on APR to a relative cap on the total cost of credit that moneylenders would be permitted to charge.
“This would be set at no more than three times the market average – or the average cost of credit charged by credit institutions and credit unions.
“This cap would be introduced on a phased basis by the Central Bank over three years by way of regulations.
“The legislation would also require the Central Bank to publish a report no fewer than once every three years; assessing the moneylending industry and the interest rates it charges, with recommendations and advice on further measures that could be introduced to protect borrowers.
“It will also enable to the Minister for Finance to make regulations to further restrict the interest rates moneylenders can charge as appropriate.
“This legislation would cap the interest rates moneylenders can charge, and it would do so on a phased basis over a reasonable timeframe.
“The Finance Committee now has an opportunity to end the unjustifiable status quo that allows moneylenders to rip off consumers with ultra-high interest rates.
“And I hope that the Committee decides to work together and progress this legislation to the next stage.”