Policing moneylenders - Let’s have a NAMA deal for the poor

OVER the last while we’ve all been enthralled and horrified as our great national soap opera unfolds, each episode more spectacular than the last.

The collapse of property developers under debts all but beyond our comprehension is just another act in the morality play of our day, a drama that may yet become a full-blown tragedy ensnaring us all.

A billion here, a bit more there; even the suggestion that one seemingly insolvent person may owe north of €2 billion. Though these blockbusters have taken centre stage the soul-destroying, family-ruining cycle of unmanageable debt that always makes the lives of the poorest a misery continues.

Today we report on enterprises – it seems a bit too tolerant, a bit too turn-the-other-cheek, to call them businesses – that charge interest rates of 187%, 188%, 176% or 160% to those people poor enough to have little option but to borrow money from them.

Remember, just a few days ago there was a national outcry when Finance Minister Brian Lenihan refused to try to stop a mortgage lender increasing rates to a figure still under 6%. Yet, these firms – Provident Personal Credit, 187%; Southside Finance Ltd, 188%, Ideal Credits/Stock Investments Ltd, 176% and the Rock Finance Company/Louis Taylor, 160% and many more – are free to prey on the people who are off the radar as far as mainstream lenders are concerned.

There is indeed one law for the rich and another for the poor. If you’re well off enough to have a mortgage you expect the Government to keep rates down; if you’ve fallen into the hands of moneylenders you can expect “men with thick necks” calling to your door at any time of the day or night demanding repayments.

As in virtually every other area of our financial services, supervision of licensed or unlicensed moneylenders seems to be little more than a suggestion; a shadowy, far-away notion that hardly seems to matter.

St Vincent de Paul and the Combat Poverty Agency have expressed concerns about how these parasites operate.

New regulations come into force next month and will restrict moneylenders to some degree. However, as in so many other spheres of Irish life, enforcement, not legislation, will be the issue.

Last week NAMA was launched to try to save our banks and the only certainty in the whole, sorry affair is that billions of taxpayers’ hard-earned money will be involved if not put in great jeopardy.

For a fraction of that cost we could have a once-off NAMA for these families and individuals in the grip of these loan sharks. Even in these straitened times it would make good sense – economically and socially – for the State to clear the debts of those 150,000 people in the clutches of these 180% merchants on the condition that they do not use those facilities again. If we were serious about a just society we could then impose upper limits on the rates these lenders could charge and whatever other conditions deemed necessary to make it work. Even if each of those 150,000 borrowers owed €5,000, and most loans are a fraction of that, the final bill would be a lot less than what scores of very moderate developers seem likely to default on.

Of course such a proposal is full of pitfalls and open to extensive abuse but if it took 20,000 individuals or families out of the cycle of debt and intimidation that they face this morning it would be worth doing.

Surely we cannot continue to leave the poorest of our poor to the tender mercies of Provident Personal Credit, Southside Finance Ltd, Ideal Credits/Stock Investments Ltd, and the Rock Finance Company/Louis Taylor and their likes.