Sinn Féin is seeking to amend a new piece of legislation it has proposed that aims to cap the interest rate charged by moneylenders.
Currently, moneylenders can charge interest of up to 187% or 288% when collection charges are taken account of.
The Consumer Credit Bill, proposed by Sinn Féin’s finance spokesman, Pearse Doherty, had proposed capping the rate they can levy at 36%.
But now the party is seeking to change that to a relative cap, set at no more than three times the market average charged by credit institutions and credit unions.
“This cap would be introduced on a phased basis by the Central Bank over three years by way of regulations,” said Mr Doherty.
“The legislation would also require the Central Bank to publish a report no fewer than once every three years; assessing the moneylending industry and the interest rates it charges, with recommendations and advice on further measures that could be introduced to protect borrowers.”
“It will also enable to the Minister for Finance to make regulations to further restrict the interest rates moneylenders can charge as appropriate.”
The proposed legislation was before the Oireachtas finance committee again today for the final session of pre-legislative scrutiny.
It heard from the Free Legal Advice Centre, Money Advice and Budgeting Service and Irish League of Credit Unions (ILCU).
It told the committee that it supports the proposed introduction of a cap on interest rates that moneylenders can charge.
The ILCU also said it deems the 36% cap as appropriate and that it does not believe this would lead to increased illegal moneylending.
However, the Minister for Finance told the committee in May that he plans to bring forward his own proposals to gradually cap the rates.
Article Source – Sinn Féin seeks to amend plans for money lender rate cap – RTE – Will Goodbody