In a statement today, Thurles Credit Union have issued a warning to its members, to avoid using moneylenders who are permitted, by law, to charge exorbitant interest rates of up to 190% APR.
The warning comes as a recent media report highlights that moneylenders are preying on the most vulnerable in Irish society, with major concerns expressed over the way in which they operate. Money-lending is the practice of giving cash loans or supplying goods or services, that are repaid at a high level of interest over a short period of time.
Legal moneylenders are required to hold a license to trade in money-lending. The Central Bank of Ireland regulates the activities of moneylenders and is responsible for issuing money lending licenses in Ireland. Currently there are only 47 licensed moneylenders operating in the Republic Ireland – no such figures however presently exist for illegal moneylenders. The Combat Poverty Agency estimates that presently there are over 150,000 people in Ireland, using moneylenders.
Thurles Credit Union along with its trade and representative body, the Irish League of Credit Unions (ILCU) has recently called on the present Government to introduce a statutory interest rate cap for licensed moneylenders. No such cap currently exists, but in practice, the ceiling is just below 190% APR.
Furthermore the majority of licensed moneylenders charge interest rates in excess of 100% APR. The ILCU’s quarterly independently commissioned research (The Disposable Income Tracker) clearly indicates that, with the level of personal indebtedness and financial exclusion in Ireland, there is a real danger of compounding the problem by allowing both legal & illegal moneylenders charge excessive rates. Availing of this type of credit will most certainly put many people in further debt & at a time when they can least afford expensive credit.
Speaking on the issue, Mr Donal Scannell (CEO) of Thurles Credit Union stated: “Thurles Credit Union contends that the rates charged by moneylenders, operating in the Republic, are excessive and we therefore feel that the State should now move to introduce an interest rate cap for licensed moneylenders. We strongly believe that this would be a positive first step in addressing the wider problem of money-lending here in this country”.
Donal added: “Sadly at Thurles Credit Union we have seen an increase in the numbers of people turning to us for help, having previously borrowed from a moneylender. People often turn to moneylenders when they feel they really have no other option. The reality of this situation is that borrowing from a moneylender will result in a continued spiralling of debt. We would strongly urge those who are considering his type of finance or those who find themselves in financial difficulty, to visit Thurles Credit Union and speak to a member of staff.”
To speak to someone at Thurles Credit Union, visit their offices in Thurles, Urlingford and Killenaule, telephone 0504- 91700 or go to their website (Click HERE)