Moneylending is the practice of providing credit to consumers on foot of a “moneylending agreement” as defined in the Consumer Credit Act, 1995 (as amended) (CCA). The “credit” will usually take the form of a cash loan but may also involve the provision of goods on credit from a retailer or the purchase of goods from a catalogue. Please see the definitions of “moneylending agreement” and “credit” in the CCA and included below for further detail in this regard.
Under the CCA a person who meets the definition of a Moneylender is required to obtain authorisation from the Central Bank in order to provide these services. A person collecting repayments on moneylending agreements on its own behalf or on behalf of another person must hold a moneylenders licence and/or hold the appropriate authorisation from the other person as prescribed by Section 97 of the CCA. As a result, all firms who intend to operate in this area should ascertain if they fall within the scope of the definition of a Moneylender and require authorisation by the Central Bank. It is an offence for such persons to commence the provision of moneylending activities until authorisation as a Moneylender has been obtained.
Firms are advised to seek legal advice if in any doubt regarding whether their activities fall within the scope of the legislation. If, having received and considered such advice, firms have any doubt about their status, they are advised to submit an application for authorisation.
A “moneylending agreement” is defined in the CCA as ‘a credit agreement into which a moneylender enters or offers to enter, with a consumer in which one or more of the following apply:
1. The agreement was concluded away from the business premises of the moneylender or the business premises of the supplier of goods or services under the agreement;
2. Any negotiations for, or in relation to the credit were conducted at a place other than the business premises of the moneylender or the business premises of the supplier of goods or services under the agreement;
3. Repayments under the agreement will, or may, be paid by the consumer to the moneylender or his representative at any place other than the business premises of the moneylender or the business premises of the supplier of goods or services under the agreement; or
4. Where the total cost of credit to the consumer under the agreement is in excess of an APR of 23 per cent., or such other rate as may be prescribed.
“Credit” includes a deferred payment, cash loan [or other similar financial accommodation].
Moneylenders do not include the following:
- Credit Unions
- Friendly Societies
- Credit Institutions
- Hire Purchase agreements with an APR under 23%
- Mortgage Lenders
All firms seeking authorisation as a Moneylender will be required to demonstrate to the Central Bank that they are in a position to meet the authorisation requirements set out in the CCA. Details in relation to the authorisation process can be found here.
Moneylenders that are authorised by the Central Bank are issued a moneylender’s licence. The licence sets out key information about a firm such as its maximum permitted APR and cost of credit, its terms and conditions and any restrictions that have been applied to the firm’s business model. A moneylender’s licence is valid for a 12 month period and must be renewed annually prior to expiry.
A list of the firms that have been authorised by the Central Bank as a moneylender is available at the following link: Register of Licensed Moneylenders
The Central Bank publishes a newsletter entitled ‘Moneylender News’ on an annual basis that seeks to promote a culture of compliance in the industry. It contains news, useful information on regulatory issues and highlights recently published documents of interest. Please click here to view the Newsletter page.