It is almost 100 years since the Money Lenders Bill 1929 was introduced in Dáil Eireann. At that time the practice of lending relatively small sums of money to low income or destitute families at extortionate levels of interest was described as “an evil that is almost ineradicable.”
The same TD who made those remarks went on to say that while this was true “we should try to make a big effort to get rid of it, and we should act in a careful and cautious way.”
Fast forward 83 years to 2012 however and we can see that this caution slowly developed into paralysis.
In fact, anyone listening in to the 2012 Dáil debate on Pearse Doherty’s Consumer Credit Amendment Bill 2012 would have heard former Fine Gael Minister of State, Brian Hayes-who now represents the interests of the banking industry-telling the Sinn Fein TD, that high rates of interest were necessary for money lenders, because if you capped the rate of interest the practice “would no longer be viable and licence renewals would not be sought.”
Doherty was trying to stop licensed money lenders from effectively charging whatever they liked to those who borrowed from them. He wanted to introduce an interest rate limit of 36% (but even the Central Bank considers interest above 23% a ‘High-Cost Loan.’)
For Hayes, it almost seemed as if money lenders charging obscene rates of interest performed some sort of virtuous public service.
He spoke about the importance of not undermining or endangering the “long-standing or family relationship with a particular moneylender,” and of how they often provided service to the “marginalised or vulnerable.”
Ultimately, the Bill was blocked by Fine Gael and the Labour Party.
Not to be put off by this voting down-Doherty reintroduced the Bill in 2018.
He again reminded the Dáil that some licensed moneylenders “continue to charge interest rates of 187% annual percentage rate, such as Colm Keegan, Rossbro Financial, a company called Stalwart Investments or Provident Personal Credit, which is involved in an aggressive campaign targeting low-income and vulnerable individuals.”
But again-the Bill was opposed.
Only this time it was opposed by Fine Gael Minister of State, Michael D’Arcy.
In opposing the Bill he repeated some of the sentiments expressed by Brian Hayes in 2012; arguing that “were lower interest rate ceilings introduced, there could be a risk that consumers would not view other regulated lenders as an alternative form of finance, but instead seek to avail of credit from unlicensed moneylenders.”
This was and is bizarre logic as it is effectively the state admitting that it has to allow extortionate levels of interests to be charged to low income families as a way of protecting them from unlicensed money lenders who are often criminals.
This point about criminals was accepted by D’Arcy when he stated that if Pearse Doherty’s Bill was to go through it might result “in forcing 7,500 people into the clutches of these criminals.”
Not withstanding the opposition from Fine Gael, the Bill was voted through by a majority of TD’s to the Finance Committee.
It never made its way out of there however and it lapsed with the last Dáil.
The current estimate is that there are about 39 licensed moneylenders in Ireland with approximately 350,000 customers. Of these, 30 (77%) are door-to-door moneylenders.
The total amount of consumer loans given out by Licensed Money Lenders in 2018 according to Doherty was €153 million.
It should be clear then that money lenders, despite almost a century of trying to prevent them from exploiting low income families remain a scourge on our society.
This is despite the fact that time and again the community based Credit Union movement has called on various governments to support low interest loan schemes to help prevent people from having to fall back on this ‘legitimate’ but ultimately repugnant sector.
Now that we have entered a period of profound economic shock it is even more likely that an increasing number of desperate people-including those who would never have dreamt of going to a money lender-licensed or unlicensed-will try and access quick cash.
Not to worry-in the spirit of the sentiments expressed in 1929; the government is currently and cautiously reviewing a ‘consultation’ on this issue. I kid you not.
In the meantime-we can be assured that the boom for money lenders is only going to get “boomier,” to paraphrase a certain Taoiseach from Drumcondra.
Money Lenders-even when cloaked by the fact that they are “regulated by the Central Bank” do not perform a noble public service.
They are parasites who thrive on poverty and the absence of a decisive political will to stamp them out.