Nat O'Connor: The Irish Times reports on the €113 million owed to legal moneylenders, who can charge over 180 per cent interest.
This is not a new issue. It was highlighted by Caroline Corr and Dr Pauline Conroy in TASC's publication, Life and Debt: Financial Exclusion in the Age of NAMA, which is an update of earlier work on this issue by the same authors.
For example, "In 2005, 23 per cent of households – or nearly a quarter – had no bank account. Many of these households – a large number of which are headed by women – are therefore forced to access financial products at prices they cannot afford. Such ‘services’ range from high-cost credit to expensive chequecashing facilities."
While a lot of attention has been focused on the ECB's concern about emergency banking legislation, the Government could do much worse that use draconian powers to require banks to provide, as a right, a basic bank account for everyone in this country. This would not necessarily include any overdraft facilities, but simply be an account free of stamp duty and transaction costs, incorporating a cash card (ATM card), with flexible account opening requirements, and no minimum opening or monthly balance.
However, instead of being helped to stablise their finances, it is highly likely that many of the people paying debts to moneylenders are badly affected by the cuts in social welfare and the minimum wage; which will drive ever more people into a cycle of poverty and further debt this Christmas.
Dr Nat O'Connor @natpolicy
Dr Nat O’Connor is Assistant Professor of Social Policy at UCD, a fellow of the UCD Geary Institute for Public Policy and former Director of TASC. Nat also previously worked at Age Action, the Labour Party, Ulster University and the Homeless Agency. You can find him on LinkedIn (natoconnor) and TwitterX @natpolicy.
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