New moneylending legislation must regulate the sector without removing access to credit for people who need it – Byrne

New moneylending legislation must regulate the sector without removing access to credit for people who need it, a Fine Gael Senator has said.

Senator Maria Byrne, Fine Gael’s Seanad Finance Spokesperson, said, “I welcome the new Bill brought to Cabinet by my colleague Minister Paschal Donohoe and approved by the Government today, to regulate the money lending sector. The legislation recognises that regulated moneylenders play an essential role in offering credit to those who need it, however we must ensure this is done in a way which gives the fullest protections to customers.

“This Bill must avoid reducing financial inclusion for those most vulnerable. It should be considered in parallel with a strengthened role for credit unions in providing short-term financing to individuals and communities.

“For example, I welcome that the Bill places a cap on interest rates, but I want to see these caps set at a level that is fair to the customer without reducing the supply of short-term credit to those who need it. Licensed money lenders provide a service to customers who don’t always have full access to credit.

“The prohibition of home collection charges is a very welcome consumer protection element of this new legislation. Moneylenders can currently charge for the service of collecting payments from the customer’s home. Collection as a practice will still be allowed but it cannot attract a charge.  This will prevent moneylenders from recouping any revenues lost due to the introduction of an interest rate cap through increased collection charges.

“I also welcome the requirement in the legislation for moneylenders to provide repayment books online. This increases transparency for customers, gives them more information and therefore better control of their finances,” Senator Byrne concluded.