New bill to restrict interest rates for moneylending loans
Draft legislation to restrict interest rates on moneylending loans has been published by finance minister Paschal Donohoe.
The Consumer Credit (Amendment) Bill 2022 aims to restrict the total cost of credit on moneylending loans. It will provide the finance minister with the power to make regulations to set a maximum interest rate for moneylending loans.
The bill will also prohibit moneylenders from charging for home collection services, and includes a range of measures to modernise and streamline the sector, including:
- Allowing repayment books to be maintained online;
- Allowing licenses to be issued for periods of five years at a time rather than one;
- Removing the requirement for moneylenders to register for a particular District Court area, and register State-wide instead; and
- Changing the term ‘licensed moneylender’ to ‘high cost credit provider’ to differentiate between licensed and unlicensed moneylenders.
The legislation follows a comprehensive review of the moneylending sector undertaken by the Department of Finance and takes into account submissions received during a public consultation held by the Department.
Mr Donohoe said: “This bill will reduce the cost of credit for the customers of moneylenders. The legislation also introduces a range of measures to reform and modernise the moneylending sector. These measures will provide better protection for consumers and will streamline the licensing process for providers.”