TDs may quiz lending agencies as 360,000 borrow from moneylenders
The figures, which will be elaborated on tomorrow by the Central Bank when it launches a report on the issue, indicates that the number of people taking out high-cost loans with money lending agencies has grown by 20% since 2007.
That is despite the number of licensed moneylenders falling from 47 to 40 in the same period.
One government TD yesterday claimed that illegal money lenders were also providing loans to people, with more likely to seek loans in the run-up to Christmas.
Figures are not available as to the extent to which people are borrowing from unlicensed lenders, but the Central Bank’s Report on the Licensed Moneylending Industry will show a growth in the number of people taking out loans where the interest rate or APR is above 23%.
The chairman of the finance committee, Labour TD Ciarán Lynch, had previously written to the Central Bank voicing his concerns that some lending groups were allowing people to take a loan in the form of vouchers for retail outlets.
Mr Lynch also expressed concern that people could end up in a situation of “rollover loans” and said the issue of money lending was on the committee’s agenda.
“The issue is on the committee’s programme and we are setting out to deal with it before the Christmas recess,” he said.
One issue could be the possible arrival into the Irish market of payday lending firms, such as those which operate in Britain and which have been the subject of debate.
The committee will seek to find out if the imposition of a cap on interest rates on the loans could resolve some of the issues around the high interest lending.
Representatives of licensed lending companies could be invited to the committee to lend their input.
Yesterday, Fine Gael Dublin South Central TD Catherine Byrne said that as no figures were available for the number of people using illegal moneylenders, “the true scale of the problem is difficult to estimate”.
“Those most likely to turn to moneylenders are low income families who are already on the margins, and who feel they have no prospect of accessing money from traditional lenders,” she said. “The moneylenders are the only ones benefitting from this situation.”
She said hearings before the committee to “put names and faces to the moneylenders operating here” would be welcome.
Charity organisations such as the St Vincent De Paul have expressed their concerns over money lending while the Money Advice and Budgeting Service said there had been a slight increase in the number of people seeking its services who said money lending was their primary difficulty.
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