No Govt plan to outlaw loan-shark rates

The Government has no immediate plans to outlaw exorbitant interest rates charged by loan sharks, the Dáil heard today.

The Government has no immediate plans to outlaw exorbitant interest rates charged by loan sharks, the Dáil heard today.

However, Tánaiste Michael McDowell confirmed that any practical measure would be considered by the Cabinet.

Minister for Social Affairs Seamus Brennan said on Monday that he was aware of finance houses charging up to 39% interest rates on loans given to the cash-strapped for events like birthdays and Christmas.

He said he was considering the legislative options open to him to cap the interest rates.

Mr McDowell today told the Dáil that the Consumer Credit Act dealt with that area.

He added: “There is no proposal before Government at the moment to alter that but the Government constantly keeps its legislation under review and if there is a practical way of improving that legislation with a view to protecting people from loan sharks, the minister will bring proposals before Cabinet.”

The issue was raised by Labour leader Pat Rabbitte who said: “Minister Brennan is very adept at putting out statements every weekend and he is rarely followed up on them.”

Mr Rabbitte also asked if the Government had plans to tax property speculators, as was recommended by Minister of State for Housing Noel Ahern.

Mr Ahern said in August that speculators trying to make a fast buck in the housing market would be better off dealing in oil and cocoa beans and should be ’taxed out of existence’.

Mr Ahern was speaking at the launch of an information handbook on affordable housing.

Mr McDowell joked that the only new taxes were those flagged by Mr Rabbitte, who, he claimed, had promised to introduce a wealth tax and increase capital gains tax.

Earlier this week, Mr Brennan urged parents with debt difficulties to urgently contact the Money Advice and Budgeting Service (MABS).

He said that the 10,000 people who contacted MABS in the past year had debts totalling €65m.

He added: “In most cases, these are large families on low incomes or on welfare and very often they are paying between 20% and up to 39% interest to finance houses, which is quite legal, for life events like Communions, Confirmations, Christmas, bereavements and so on.

“There are new types of pressures there and I need to have a very close look at it to see if any options are open to me.”

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