Exit of Provident from doorstep lending underlines urgency of Sinn Féin legislation to cap moneylender interest rates - Pearse Doherty TD
Sinn Féin spokesperson on Finance Pearse Doherty TD has responded to today’s announcement that Provident, the largest moneylender in the Irish market, will no longer be issuing loans with immediate effect.
The Donegal TD called on the government to respond to today’s announcement by:
- Supporting Sinn Féín’s legislation to cap the cost of credit that moneylenders can charge,
- Introducing legislation to increase the interest rate cap on credit union loans from 1 to 2 percent, and
- Publishing a Financial Inclusion Strategy for this decade.
Speaking today, Teachta Doherty said:
“The announcement by the largest moneylender in the state, Provident, that it will no longer be issuing loans underlines the need for swift action in the personal credit sector.
“Provident, who offered high cost loans to vulnerable borrowers, announced this morning that it will no longer be issuing personal loans in Britain and Ireland.
“This comes after running a loss of £133.5 million last year and an investigation by the British regulator into unscrupulous lending practices.
“In fact, the British Financial Ombudsman has been reported to have upheld 65 percent of affordability complaints made against the moneylender.
“There is no doubt that its withdrawal from the Irish market requires a coordinated response to protect the interests and resilience of borrowers.
“The government should now support Sinn Féín’s legislation to cap the cost of credit that moneylenders can charge borrowers.
“At present, the government allows these moneylenders to charge APR as high as 287%, with many families locked into a vicious cycle of debt.
“The Minister for Finance should now work with Sinn Féín and the Finance Committee to ensure this legislation protects borrowers and puts an end to the scandalous rates of interest these moenylenders charge.
“The Minister must also introduce legislation that would increase the interest cap on credit unions from 1 percent to 2 percent.
“This would allow credit unions to play a greater role in the personal credit market, and offer an affordable and more sustainable option for borrowers who need access to credit.
“Despite the Credit Union Advisory Committee recommended this change more than two years ago, the Minister is yet to produce the legislation. This is disappointing.
“Thirdly, the government should publish a Financial Inclusion Strategy for the next decade, to improve access to credit among low-income and vulnerable groups who are excluded from financial service provision.
“It is a decade since a Financial Inclusion Strategy was published by government. Put simply, this government doesn’t have one.
“The government should take action in response to today’s announcement by Provident.
“That must begin by supporting Sinn Féín legislation to cap the cost of credit that moneylenders can charge. That legislation is currently before the Finance Committee.”