Wednesday, 28 June 1933
Dáil Éireann Debate
An Ceann Comhairle: Item 17 on the Order Paper—Moneylenders Bill, 1933 —Second Stage—is a Private Deputy's Bill. The order for the Second Stage of that Bill is discharged, by leave of the House, and the Bill is withdrawn. The House will now proceed with the Second Stage of the Moneylenders (No. 2) Bill, 1933.
Minister for Justice (Mr. Ruttledge): This Bill was first introduced as a private measure in 1929. It was considered on Second Reading and referred to a Select Committee. The Select Committee held a number of sittings and heard a great deal of evidence and in December, 1931, that Select Committee reported back to the House. The Dáil was dissolved shortly afterwards, and that necessitated the Bill being reintroduced. Before very much progress was made the Dáil was again dissolved, and the Bill had to be reintroduced. Subsequently, in order to get the measure perhaps a quicker passage, as it was fairly agreeable to all sides, it was thought that it might be made a Government measure and that is the reason it is now on the Order Paper as a Government measure.
Anybody reading the Report of the Select Committee, and the evidence given before it, will be satisfied that such a Bill as the present one is necessary. Moneylending, so far as this country is concerned, is based upon legislation passed in the year 1900. The Moneylenders Act of 1900 was an Act which under present circumstances is not suitable to the needs of the community. It made certain provisions with regard to the registration of moneylenders. The regulations made under that Act were such that registration could not be refused for reasons for which it must be refused under this Bill. When registration was applied for the Revenue authorities, on the payment of the necessary fee of £1, were bound to grant that licence provided, of course, minor qualifications existed. Another defect of the 1900 Moneylenders Act was that unless a court was satisfied that the interest charged  was excessive, or that the transaction was harsh and unconscionable, it had no power to intervene. Leaving the position in that vague way has resulted in various judges and various courts giving different interpretations as to what interest is excessive and unconscionable. Under Section 13 of the Bill the maximum amount of interest is set out at 39 per cent. I may say that an Act similar to this Bill was passed in England in 1927 in which the interest was fixed at 48 per cent. However, the Select Committee was satisfied that 39 per cent. was a sufficient margin. That does not mean that in any transaction 39 per cent. cannot be held to be excessive, but it gives, at any rate, some idea to the courts as to the line on which they are to go. Where the rate of interest is not stated in the transaction, the First Schedule provides the method of calculation in assessing interest.
The main provisions of the Bill, apart from the interest, are concerned with the methods by which registration can be secured by moneylenders. Provision is made in the Finance Act as to the fees to be paid: £15 for a full year and £10 for part of a year, where the licence is taken out some time before 31st July and does not cover a full yearly period. It has to be renewed each year. Under the 1900 Act it had only to be renewed every three years. Under that Act also, as a matter of fact, the Revenue Commissioners could not refuse registration if certain qualifications existed. According to the provisions of this Bill, the moneylender cannot get a certificate from the District Justice unless he conforms to certain things. Objection can be taken to his application by a Superintendent of the Gárda or by a resident in the locality. The grounds upon which a certificate can be refused are set out in Section 4. When the certificate has been granted, it is taken by the moneylender to the Revenue Commissioners and the necessary fees are paid. I might point out, however, that if the moneylender is dissatisfied or if the opposing party is dissatisfied with the  decision of the District Justice, there is an appeal to the Circuit Court Judge and that is the final appeal. While the appeal is pending, the Revenue Commissioners have power to issue an interim or temporary licence and they can impose any conditions they think necessary.
Sections 6, 7 and 8 deal with advertising and the issuing of circulars by moneylenders, touting, as it is called, or canvassing. Prior to the introduction of the Private Member's Bill dealing directly with moneylending, in 1929 a Private Member's Bill had been introduced dealing with canvassing and advertising. These sections deal with the restrictions imposed with regard to it. Section 9 deals with the form of contract and sets out the memorandum which must be signed by the parties, the moneylender and the borrower. In the case of a married woman solely dependent upon her husband, the husband must also sign the contract. In the evidence tendered to the Select Committee cases were brought to their notice where great hardship was entailed and the suggestion was made that blackmail had been resorted to in cases of married women borrowing. Section 10 deals with the question of compound interest. Section 11 imposes on the moneylender an obligation to supply information as to the state of the loan and any other information which the borrower thinks necessary. On payment of a fee of 1/-, the moneylender is bound to supply the necessary information as to the position with regard to the interest and principal that may be due at that particular time and also particulars of payments previously made.
Section 12 deals with the position with regard to bankruptcy proceedings for moneylenders' loans. It sets out a rate of 5 per cent. and enables the court, should the assets permit, to take into account a higher rate of interest if they think it advisable. I have already referred to Section 13, which sets out the rate of interest at 39 per cent. Section 14 deals with the charging of expenses and the charging of negotiation fees and preliminary expenses with regard to borrowing. A considerable amount of evidence on  that aspect of the question was brought before the Select Committee. Cases were mentioned where certain people had been circularised and, after having their cases examined, were told that if they paid a certain fee the loan would be considered. After paying the fee, however, they did not get the loan they were seeking.
Section 15 deals with the limitation of time for proceedings in respect of money lent by moneylenders. The section sets out broadly that proceedings must be taken within three years from the time the money accrues due. There are certain qualifications inserted to protect people who might in the ordinary way have difficulty in taking proceedings; where, for instance, a person who had borrowed money was non compos mentis, or had gone overseas, and so on. In these cases it is provided that the time should not begin to run until the person had become sane or, in the other instance, had returned from overseas. Section 17 prohibits moneylending on Sundays, Christmas Day, Good Friday, and St. Patrick's Day. Section 19 deals with assignees. That matter was dealt with in 1911 in a short Act consisting of three sections. That Act set out that if a bona fide assignee or holder for value was not aware of a previous transaction he should not be prejudiced. The First Schedule sets out the method of computation of interest where a rate has not been agreed upon which is a rate not exceeding 39 per cent. These are the main provisions of the Bill. It goes no farther and seeks to secure no less than was agreed upon by the Select Committee and, having been agreed upon to that extent, I anticipate that the Bill will receive the unanimous approval of the House.
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