AT THIS TIME of the year, the financial pressure is increased on families.
Some take out loans from credit unions or banks, but some are forced to go to pawn shops.
In Ireland, anyone who charges more than 23% interest falls into this category.
While 23% seems high, in the US, UK and across Europe payday loan companies charge between 700% and 900% interest.
For one of the UK’s biggest companies, Wonga.com, their representative APR figure is a bit higher than that.
Last month, the UK announced that from January, payday loan companies will be subject to much stricter controls.
These controls cap the cost of loans at 0.8% per day and the cost of a loan at 100%. The city regulator says the new regulations will take about 700,000 people and make them ineligible for loans.
One in 20 families in the United States has taken out one of the loans, and the industry has gone to great lengths to ensure its survival.
Source: Last week tonight/Youtube
What about Ireland?
In Ireland there are no payday loan companies. Officially, the Central Bank says there is no policy against them, but the application process for any agency wishing to charge more than 23% is strict.
Sources within the industry claim that while the Central Bank will consider demand, there is no appetite within any branch of government or regulation to see high interest short-term loans coming in. Ireland.
However, there are currently no plans to regulate their arrival.