Time to crack down on the greedy lenders

IT is, of course, stating the obvious to say that these are the hardest times that any of us has ever known. At no point in living memory have ordinary taxpayers found themselves labouring under such testing conditions.

The worst- hit victims i nclude the countless thousands of industrious people who have been consigned to the dole queues that snake right across the country. But those households where the breadwinners are still in full employment have hardly fared much better.

Thanks to a string of austerity budgets, even PAYE workers who would previously have considered themselves wellremunerated are now finding it a struggle. The raft of stealth taxes introduced over recent years make the situation even more difficult to bear and, of course, there are further levies on the way.

Against that backdrop, it is little surprise that increasing numbers of families are being forced to borrow to cover the cost of their everyday outgoings. Inevitably, this trend will grow even further as Christmas approaches.

Yet the fact that the banks remain exceptionally reluctant to lend any money at all is creating an entire problem in itself. The result is that hardpressed families are finding themselves with no other option than turning to unscrupulous moneylenders.

Figures revealed in today’s Irish Daily Mail show that borrowers can end up paying interest rates of up to 287 per cent a year. This means that a loan of €1,000 would result in a debt of almost four times that amount after 12 months.

Incredibly, these fees are being legally charged by lenders who are officially licensed by the Central Bank. It beggars belief that regulators sanctioned such exorbitant rates in the first instance; that they are still in place in the current economic climate is a scandal.

As a matter of extreme urgency, the Central Bank must introduce limits on the interest that moneylenders are allowed to charge. They must also ensure that these caps are strictly adhered to. The exploitative rates being imposed have no place in today’s society.

Meanwhile, the onus is on the Government to forced the banks to start lending again. Their current refusal to do so is every bit as inexcusable as their recklessness in throwing money around like snuff at a wake during the Celtic Tiger era – and, for those unfortunates who find themselves in the clutches of moneylenders, potentially even more damaging.