Criminal Justice (Unlicensed Money-Lending) Bill 2013
Speech by Minister for Justice, Equality and Defence, Mr. Alan Shatter TD
Second Stage (Seanad Éireann)
22 May 2013
A Chathaoirligh,
I would like, at the outset, to express my appreciation to Senator Mac Sharry for publishing the Criminal Justice (Unlicensed Money-Lending) Bill 2013. The Senator has, through this Bill put on the agenda once more the important issue of illegal money-lending.
Responsibility for legislation on the regulation of money lending and the prohibition of illegal money lending lies with the Ministers for Finance and Enterprise, Trade and Innovation respectively. Comprehensive legislation targeting the illegal lending of money has been on the statute books for some time, and has, indeed, been strengthened in recent years.
Licensed money lenders operate under the regulatory control of the Financial Regulator who can impose “administrative sanctions” against moneylenders licensed by it for prescribed contraventions of legislation or regulatory rules.
The focus of today's debate is illegal money lending which is addressed by Section 98 of the Consumer Credit Act 1995. This prohibits any person from engaging in the business of money lending without a licence. Acting as an agent of an unlicensed moneylender is also prohibited.
A member of the Garda Síochána has considerable powers under the Act where they have reasonable cause to suspect that a person is engaging in the business of unlicensed money-lending. The member may, without warrant, stop, question, search (if need be by force) and remove from that person any documents or money which the member reasonably believes may be in that person's possession for the purpose of money-lending.
It is an offence to obstruct or interfere with a member of the Garda Síochána using those powers. It is also an offence to give a Garda information which is false or misleading, or to fail to comply with any request made by a Garda using those powers.
The primary offence of engaging in unlicensed money lending is indictable and it is noteworthy that legislation brought forward by the Department of Enterprise Trade and Innovation, namely the Investment Funds, Companies And Miscellaneous Provisions Act 2005, increased the penalties for the offence to a fine not exceeding €100,000 or imprisonment for a term not exceeding 5 years or both. In addition, the offence of demanding money with menaces, under section 17 of the Criminal Justice (Public Order) Act 1994 already carries a penalty of up to 14 years imprisonment.
As Minister for Justice, I share the Senator's concern for persons who fall victim to those unscrupulous individuals who would prey on their fellow citizens through illegal money lending. I think the House will agree, however, that the powers granted to the Gardaí to address the problem, and the penalties available to the judiciary in this regard are considerable. In that regard the provisions of this Bill, would not in fact create any new powers or penalties.
In effect the Bill replicates offences which are already on the statute book.
The provision in section 2 of the Bill which proposes making an offence of “extortion, demanding money with menaces and unlicensed money-lending.” replicates and merges the separate offences already contained in the Criminal Justice Public Order Act 1994 and the Consumer Credit Act 1995.
The Criminal Justice Public Order Act 1994, section 17 provides for the offence of Blackmail, extortion and demanding money with menaces. This section already provides that it is an offence for any person who, with a view to gain for himself or others or with intent to cause loss to another, makes any unwarranted demand with menaces.
The Consumer Credit Act, 1995, section 98 provides for the prohibition on engaging in business of moneylending without a license. This section already provides that a person shall not engage in the business of moneylending on his own behalf unless the person is the holder of a moneylender’s license, and maintains a business premises for that purpose.
However, whereas the existing legislation provides clarity in dealing separately with these two very separate and distinct offences, the proposed Bill would, in my view create confusion by effectively merging these two separate offences.
Furthermore, the penalties proposed in the Bill are equivalent to the penalties already imposed for the relevant offence under the 1994 Act. This already carries a penalty of up to 14 years on indictment.
In addition, the law already provides in the Criminal Justice Act 2007, section 26, that a Court may make a monitoring and protection order to protect a victim of an offence from harassment by the offender. This provision can be made by a Court in regard to the offence of demanding money with menaces, as defined by section 17 of the 1994 Act. A Court may also make an order protecting a person from harassment, under section 10 of the Offences Against the Person Act 1997, even where the court finds that the alleged offender is not guilty of an offence. This is identical to the provision in section 2 (5) of the Bill.
For these reasons, The Bill would not provide our Courts or An Garda Síochána with any powers that they do not already have under existing legislation. The Bill would therefore have no legal effect other than to make the law less effective and more obscure by blurring the distinction between the separate offences of illegal money-lending and demanding money with menaces. This would, in my view not be appropriate.
I think that we are all aware as public representatives of the damage that illegal moneylenders can cause in people’s lives. Typically they prey on the most vulnerable and disadvantaged people in our communities, and charge extortionate interest rates for money lent. Interest rates in excess of 100% are by no means unusual. Prosecuting people for the offence is very difficult because the loans are informal and undocumented, and the vulnerable victims often live in terror of the money lender so they are typically extremely reluctant to make formal complaint about the offender. I have been advised by the Garda authorities that where offences under section 98 are disclosed, and are reported to An Garda Síochána, the matter will be the subject of investigation under the direction of the local District Officer, with relevant expert assistance available from the Garda Bureau of Fraud Investigation.
I would encourage those who have information concerning the operation of unlicensed money lenders to make that information available to An Garda Síochána who will take all measures open to them to enforce the law in this area.
However, we must remain aware of the considerable reluctance of victims to provide evidence against offenders to whom they owe money. Prosecutions for illegal money-lending are very infrequent. There is currently one case pertaining to illegal money-lending activities (offences under the Consumer Credit Act 1995) currently before the Courts.
Because of the infrequency of prosecutions, I believe that in tackling the problem, legislation and enforcement can only go so far. I believe that addressing the issue has greatest success when the support and assistance of the community is brought to bear to ensure that persons in vulnerable positions are well advised on steering clear of illegal money lending. This is why I believe that community based initiatives such as the Money Advice and Budgeting Service (MABS) are quite crucial in ensuring that people who are under financial pressure can be advised to take the appropriate steps to avoid falling into the moneylender's trap. MABS also advises people on how to reach accommodations with credit institutions and how to avail of the exceptional needs assistance available from Community Welfare Officers. In concert with MABS, other services such as Credit Unions, Community Development Projects, Family Support Centres, social services and Government funded voluntary organisations such as the Saint Vincent de Paul play an important role in providing appropriate advice and guidance to vulnerable people.
I know that Senator Mac Sharry will be aware of the efforts of the CAILM (Communities Against Illegal Money Lending) initiative in his own constituency, which is an inter-agency approach funded by the Government involving the local community, the Money Advice Bureau Service, the Credit Union, Focus Ireland, the local Gardaí and Social Services in diverting people away from illegal money lending.
In conclusion I would again state that we all share the concern for persons who fall victim to those unscrupulous individuals who would prey on their fellow citizens through illegal money lending. I think the House will agree, however, that the powers granted to the Gardaí to address the problem, and the penalties available to the judiciary in this regard are considerable. The Bill would not in fact provide our Courts or An Garda Síochána with any powers that they do not already have under existing legislation. The Bill would therefore have no legal effect other than to make the law less effective and more obscure by blurring the distinction between the separate offences of illegal money-lending and demanding money with menaces. This would be a very undesirable outcome.
I
therefore must oppose the particular provisions of the Criminal Justice (Unlicensed Money-Lending) Bill 2013 before us here today.