Draft legislation which if enacted will extend the Central Bank's Consumer Protection Code to hire purchase and Personal Contract Plan (PCP) providers has been published.
The Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Bill 2021 will require firms to assess the suitability of the product for the consumer.
It will also compel them to evaluate the ability of the borrower to repay the debt over the duration of the credit agreement.
Providers of indirect credit to consumers will also become regulated by the Central Bank under the Bill.
The Bill will also provide for the regulation of entities that service or own these agreements.
It will also see the existing interest rate cap on credit and hire purchase agreements extended to all entities under the scope of the Consumer Credit Act through some amendments to that Act.
However, money lenders do not fall within its remit.
The draft laws would implement the key recommendation in the 2018 "Tutty Report" which was commissioned by the Minister for Finance.
Paschal Donohoe says he hopes the Bill will be enacted later this year.