THE CENTRAL BANK of Ireland has announced new restrictions for all moneylenders, with warnings to be placed on ads for loans with an annual percentage rate (APR) of 23%, or over.

These warnings will also require ads to prompt consumers to consider options other than moneylenders.

There are currently 38 licensed moneylenders in Ireland as of 20 April 2020, with APR on loans ranging up to 188%.

Citing the impacts of Covid-19 on consumers, the Central Bank is implementing these restrictions on 1 September, with all other restrictions to be introduced on 1 January 2021.

According to a Central Bank spokesperson, there has not been an increase in consumers accessing moneylenders due to Covid-19.

The Central Bank has urged them to be sensitive to changes in the finances of their consumers, saying that many have been left in a “financially vulnerable situation”. 

“Licensed moneylenders who continue to issue loans to consumers must ensure they carry out adequate affordability assessments, particularly taking into account any financial difficulties faced by consumers as a result of Covid-19″, said the spokesperson.

Among the new restrictions, moneylenders will no longer be able to make unsolicited offers to consumers who have paid, or nearly repaid, a previous loan.

With these restrictions, contact between moneylenders and consumers will be limited, allowing consumers more control over when they are contacted by moneylenders. 

“It is important that people who use moneylenders are fully aware of the high cost nature of their loans. By strengthening the rules, we are providing the customer base with further protections and raising the expected professional standards in this industry”, said Gráinne McEvoy, Director of Consumer Protection.

As part of raising professional standards, all moneylenders will be forced to alert consumers to the Money Advice and Budgeting Service (MABS) if they wish to access a loan for essential needs, such as rent or electricity. 

McEvoy also advised consumers to look at alternatives to moneylenders and to avoid unlicensed moneylenders entirely. 

Minister for Finance, Paschal Donohoe welcomed the new regulations, saying both the Government and Central Bank are committed to “enhancing consumer protections”. 

“I welcome the introduction of requirements regarding the identification of vulnerable consumers and the provision of arrangements to facilitate them in dealing with moneylenders.”