Credit unions and loan interest
Sir, – The recent failure of the Cabinet to approve Minister for Finance Paschal Donohoe’s proposals to allow credit unions charge more than 12 per cent interest on loans per annum is flabbergasting (“Ministers concerned over plan to expand lending by credit unions”, Business, January 5th), particularly when it was under the nonsense guise of trying to avoid “aggressive moneylending”.
The proposal is to double this limit to 24 per cent per annum.
Moneylenders operating in Ireland already charge staggering interest rates to those at risk of financial exclusion, with the most well-known operator charging 187.2 per cent APR to borrow €500 over 26 weeks.
The reluctance of the Government to intervene in the capping of standard variable rate mortgage interest rates in the bailed-out banks is all the more bizarre when one considers that it already has this sort of legislation on the books for these community-based co-operatives. – Yours, etc,
Dennehy’s Cross, Cork.