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ILCU has welcomed the commencement of the Consumer Credit (Amendment) Act 2022

Posted on: 21 Nov 2022

The Irish League of Credit Unions (ILCU) has welcomed the commencement by Minister for Finance Paschal Donohoe of the Consumer Credit (Amendment) Act 2022.
Commentating on the commencement of the Act, ILCU CEO, David Malone said, “The ILCU has long maintained that the introduction of a significantly reduced statutory maximum interest rate would help to alleviate cases where the high cost of borrowing has condemned individuals and families to a lifetime of debt. The Consumer Credit (Amendment) Act sets out a number of significant regulations which will enhance consumer protection, especially for those who are in vulnerable situations. The Act is a welcome first step in placing a cap on high cost moneylenders. What is also important is the mechanism which allows the Minister for Finance to further reduce the cap as he sees necessary.”
Commenting on specific provisions in the Act, David Malone said,

  • “The ILCU welcomes the initial interest rate cap of 1% per week and maximum interest rate set at 48%. The ILCU has long campaigned for the introduction of an interest rate cap on moneylenders and had proposed a maximum rate of 36%.

  • We also welcome the prohibiting of high cost credit providers from charging for home collection services.

  • The Act sets out to allow repayment books to be maintained online. The ILCU has advocated for borrowers to have real-time, on-line access to their loan details and payments history and also to have multiple options to make payments. The inclusion of this provision is welcomed.

  • Changing the term ‘licensed moneylender’ to ‘high cost credit provider’ to differentiate between licensed and unlicensed moneylenders is also welcomed by the ILCU. The ILCU believes that licenced money lenders should be clearly differentiated from illegal operators.”

Concluding Mr. Malone said “The ILCU notes the proposed regulation of allowing licenses to be issued for periods of five years at a time rather than one. We believe that an annual renewal process is more suitable as it allows for any issues arising with a high cost credit provider to be addressed in a timely manner including cancellation of a licence if required.”

“Credit unions continue to play a positive role credit in supporting those in need of affordable credit by issuing over 200,000 loans of under €2,000 every year at a maximum rate of 12.68%. I would encourage anyone requiring a loan to contact their local credit union rather than looking to high cost credit providers.”