Friday 22 September 2017

Rules on moneylending face regulatory review

Some 400,000 people are estimated to use moneylenders. Photo: Stock Image
Some 400,000 people are estimated to use moneylenders. Photo: Stock Image
Charlie Weston

Charlie Weston

Regulators are to review the rules governing moneylenders, in a move that could see changes in how they operate.

Door-step lenders are also facing a further squeeze as 100 credit unions have now signed up to a State-backed scheme that offers easy access to loans to low-income households in a bid to loosen the grip of moneylenders.

Some 400,000 people are estimated to use moneylenders, who can legally charge interest rates of up to 200pc, which rises to as high as 290pc when collection charges are included.

The Central Bank plans to conduct a review of its Consumer Protection Code for Licenced Moneylenders to see if it needs to be strengthened.

Director of consumer protection at the Central Bank Bernard Sheridan said the regulator gets few complaints from people who use moneylenders, but this did not mean that there was not a need to tighten up the rules. Critics of moneylenders accuse them of preying on the vulnerable with easy access to cash, often offered on doorsteps.

The prevalence of moneylenders prompted a number of State agencies to come together last year to offer State-backed loans though credit unions in a bid to clamp down on moneylenders.

Irish Independent

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