Sinn Féin seeks to change pawnshop rate cap plans

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Sinn Féin is seeking to amend a new bill it has proposed that aims to cap the interest rate charged by pawn shops.

Currently, lenders can charge interest of up to 187% or 288% when collection costs are factored in.

The consumer credit bill, proposed by Sinn Féin finance spokesman Pearse Doherty, had proposed to cap the rate they can charge at 36%.

But now the party is looking to change that to a relative cap, set at no more than three times the market average charged by credit institutions and credit unions.

“This cap would be phased in by the Central Bank over three years through regulation,” Doherty said.

“The legislation would also require the Central Bank to issue a report at least once every three years; assessing the money lending industry and the interest rates it charges, with recommendations and advice on others. measures that could be introduced to protect borrowers. “

“It will also allow the Minister of Finance to make regulations to further restrict the interest rates that lenders can charge, if any.”

The bill was resubmitted today to the Oireachtas Finance Committee for the final pre-legislative review session.

He has heard from the Free Legal Advice Center, the Money Advice and Budgeting Service and the Irish League of Credit Unions (ILCU).

He told the committee that he supported the proposed introduction of a cap on the interest rates that lenders can charge.

The ILCU also said it found the 36% cap appropriate and did not believe it would lead to an increase in illegal money lending.

However, the finance minister told the committee in May that he planned to come up with his own proposals to gradually cap rates.

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