Explainer - How does the Central Bank propose to better protect people who use moneylenders?

Protecting consumers

Moneylenders give people small loans, over short time periods, charged at high interest rates. This means that using a moneylender is one of the most expensive ways you can borrow money. Moneylenders are usually firms that call door-to-door (home collection firms) whose main business is lending money. However shops or catalogue companies that offer high-interest credit can also be licenced as moneylenders. As at the end of 2017, there were 39 licensed moneylenders in Ireland with approximately 350,000 customers. Of these, 30 (77%) were door-to-door moneylenders while two (5%) were catalogue companies. The remainder were other types of moneylender such as firms which provide goods on credit.

Moneylenders in Ireland

The Central Bank of Ireland regulates the licensed moneylending industry in Ireland. This means we set rules and standards that moneylenders must follow. You can read the rules in the Consumer Protection Code for Licensed Moneylenders.

As a regulated sector, moneylenders require a licence from the Central Bank to operate. It is illegal for a moneylender to operate without such a licence. Licensed moneylenders authorised by the Central Bank are listed on our Register.

Protecting consumers

Licensed moneylenders play an important role in society for people who can’t access cheaper loans. However at the same time they have a duty to lend responsibly and treat their customers fairly. There is already a strong framework in place to ensure moneylenders act in the best interests of consumers. For example, moneylenders must:

  • Highlight the high cost of their loans
  • Be open about all of their charges
  • Not penalise people for making extra, missed or late payments.

Now the Central Bank wants to introduce new measures to better protect people who use moneylenders.

Our proposals

We have published a wide range of new proposals and measures to better protect people who use moneylenders. You can read them in full in our Consultation Paper.

If adopted, the main proposals would:

  • Promote responsible lending: Restrict how moneylenders can advertise and how they can contact consumers.
  • Introduce repayment limits: Limit how much of a person’s income is used to repay a loan from a moneylender.
  • Protect vulnerable consumers: Better protect people who use moneylenders to pay for immediate basic needs like food, bills and accommodation.
  • Improve industry practices: Require better training for staff of moneylenders and ensure clear policies and procedures.

Have your say

We want to know what consumers and consumer groups think of our proposals.

Submit your views by email: consumerprotectionpolicy@centralbank.ie

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