South Monaghan Sinn Féin County Councillor, Matt Carthy, has said that he was shocked to learn that Fine Gael and the Labour party voted down a Sinn Féin motion which would have capped the amount of interest money lending institutions could charge at 40%, itself a high figure well above that charged by banks and credit card companies. Cllr. Carthy has called on Co. Monaghan Fine Gael Councillors to condemn the actions of their local TD’s who voted against this reasonable motion and who chose again to side with Moneylenders against ordinary families.
Cllr. Carthy said: “When Monaghan County Council met in the offices of Clones Credit Union last year we heard of the hardship being caused as a result of the high levels of interests being charged interest rates by unscrupulous money lenders. All councillors, including Fine Gael members, rightly called for government action. But when legislation was put to the Dáil last week which would have helped these families – government Deputies, including Heather Humphreys and Sean Conlan, voted it down in yet another shameful act.
“In County Monaghan today low and middle income families are struggling to get by. As each month passes the recession bites deeper. Unemployment, wage cuts, tax increases, the household charge, cuts to rent supplement and rising mortgage distress are pushing more and more families into severe financial hardship.
“And, unfortunately, hundreds of Monaghan people are turning to moneylenders to make ends meet.
“On a daily basis families are have to make impossible decisions – do they pay their gas or electricity bill or do they pay their mortgage.
“And when faced with such impossible choices many are getting into even greater levels of debt just to get by.
“The Irish League of Credit Unions ‘What’s Left’ tracker report, published just last week, provides a very graphic picture of the human face behind these figures. Across the state 1.8 million families are left with €100 or less each month after bills are paid
“25% of credit card holders rely on their credit card to make ends meet each month.
“40% of people have borrowed to pay their household bills in the past 12 months, 10% using moneylenders”.
Cllr. Carthy continued: “Incredibly, there is no cap on the rates of interest that licensed moneylenders can charge. There are 46 licensed money lenders operating in the state. According to the latest figures they provide credit to over 300,000 people many of them in Co. Monaghan and surrounding counties.
“Much of this credit is short term loans, often at very high interest rates.
“Under existing legislation there is no cap on the interest charged by licensed moneylenders. Some lenders charge an APR of up to 210%.
“What politician or Government Minister could support such high charges? we might ask.
“In fact, the only reason lenders can charge such excessive rates is because no Government, either Fianna Fáil or Fine Gael, has placed a cap on interest rates.
“As a result of the inaction of the Oireachtas some lenders are getting rich on the back of hard pressed families. 13 EU member states operate interest rate caps on licensed moneylenders. In Belgium for example the cap ranges from 10% to 19.5% APR. In France the range is from 5.7% to 21.6%. In Spain the rate is 10%.
“In these and other states, politicians have decided that there is a limit to the amount of interest that licensed money lenders can charge, particularly when lending to low income families struggling under the weight of household debt.
“In order to address this issue Sinn Féin TD’s tabled a Bill in the Dáil last week that sought to bring this state into line with our EU counterparts.
“Of the 46 moneylenders with licences in the state, 29 of them have APR’s of more than 100%. Fourteen of these charge over 150%.
“A 210% APR means that a €500 loan taken out by a struggling family to pay a gas or electricity bill would cost them €186 if the loan was for six months and €375 if the loan was for twelve months.
“Given that a €500 loan from a credit union would cost the same family €13 and €25 respectively there is simply no justification for this massive mark-up.
“Such excessive interest rates push hard pressed families further into financial stress and poverty. There is no moral or economic justification for the absence of a cap on interest rates charged by licensed moneylenders.
“Sinn Féin’s Moneylender Bill proposed a cap of 40% APR. This would mean that while some lenders would be required to charge less than this, no lender could breach the 40% cap.
“This would still mean the €500 loan would cost the struggling family a maximum of €50 over six months or a maximum of €97 over twelve months. This level is fairer to customers while allowing licensed lenders to operate on a sound commercial basis.
“Unfortunately, when given the choice, Fine Gael TD’s, including our local representatives, voted down the Sinn Féin Bill.
“Sinn Féin’s Moneylenders Bill was a very modest proposal. However it was a proposal that if put into law would have an immediate impact on the financial hardship experienced by tens if not hundreds of thousands of hard pressed families across the state and hundreds in County Monaghan alone. It would have made life a little better for a very large number of people at a time when so much of their lives are hit with bad news.
“It will be to the eternal shame of those TD’s who voted against the Bill. However, there is now a responsibility on Fine Gael Councillors to ask their Deputies to explain their actions and force them to start standing on the side of ordinary families. Otherwise, they too can share the shame!” Cllr. Carthy concluded.