by Alan Jacques
MANY Limerick people are being forced to go to moneylenders to pay for family events like First Holy Communions, weddings and funerals.
And local Fianna Fáil TD Willie O’Dea is now calling for a relaxation of Central Bank regulations on loans of under €1000 to help hard-pressed families meet the cost of special events without recourse to moneylenders.
Deputy O’Dea, who is his party’s spokesman on Social Protection claims that many of his constituents in Limerick City are being forced to go to moneylenders.
He believes that the Central Bank has gone overboard in relation to the red tape involved in the provision of small loans of €1000 or less and this is causing “undue hardship” for many vulnerable people in Limerick.
“The Credit Union has traditionally provided small loans at affordable interest rates, particularly to those who cannot access credit elsewhere. Irish people depended on the Credit Unions for small loans to help them through tough financial times like Christmas, weddings, funerals and First Communions,” Deputy O’Dea pointed out.
“Now when there is probably more need than ever for this type of loan, the Central Bank’s requirement that extensive documentation such as payslips, bank statements, credit card details and mortgage statements are provided for these micro loans is proving excessive in my experience.”
As a result, vulnerable people in Limerick are turning to moneylenders who are charging them exorbitant interest rates.
“We all agree that the Central Bank are correct to ensure responsible prudent lending, however, because these rules apply to all loans regardless of size, it is an example of the ‘one size fits all’ approach to regulation that is not serving the community and is instead forcing people to turn to vulture moneylenders.
“Discretion regarding the lending of small amounts of money needs to be restored to credit unions in particular,” he concluded.
