Department of Finance launches consultation on capping the cost of licensed moneylenders and other regulatory matters

The Department of Finance is considering proposals to cap the cost of borrowing from licensed moneylenders. The Department wants to get views on whether the introduction of a cap on interest rates would have a negative effect on the regulated supply of credit and might lead to an increase in illegal moneylending or to financial exclusion for consumers of these regulated firms.

It has launched a public consultation paper seeking views on this and other related issues which is available on its website Public Consultation - Capping the cost of licensed moneylenders and other regulatory matters

The Department is interested in hearing from all stakeholders who have views on this subject, including licensed moneylenders and, in particular, their customers who have first-hand experience of borrowing from them and how they operate.  Responses from people who have worked with customers of moneylenders and have indirect experience of dealing with them would also be welcome.

The closing date for receipt of submissions is 31st July.

The paper asks a number of questions about moneylenders and anyone responding can answer as many questions or as few questions as they like.

As well as questions on interest rates and charges, the Department is also asking questions on home collection practices, soft copies of documentation, regulatory rules, advertising and the terminology used to describe moneylenders.

ENDS

Contact:

Deborah Sweeney, Press Advisor to Minister Donohoe - 086 858 6878

Aidan Murphy, Press Officer, Department of Finance – 085 886 6667

pressoffice@finance.gov.ie

Notes for Editors

• Currently, there are 39 licensed entities authorised by the Central Bank.
• The licensed moneylender sector had €153 million of loans issued at December 2017, which includes Home Collection and other forms of licenced moneylending which have an APR above 23 per cent.
• The maximum rate of APR, excluding collection charges, that moneylenders are licensed to charge ranges from 24.80% to 188.45%.  The maximum rate of APR, including collection charges, ranges from 152.3% to 287.72%.
• It is estimated by the Central Bank that there were approximately 350,000 customers of licensed moneylending firms in 2017.
• Complaints against regulated moneylenders may be investigated by the Financial Services and Pensions Ombudsman