The bank has given customers in debt management 30 days to refinance their loans with another lender or potentially face a loan sale to a third party investor.
Farm organisations in the Republic and the North have responded angrily to the bank’s sudden announcement that it plans to dispose of loans in its specialist loans arrears unit to undisclosed third parties.
Eddie Punch, ICSA general secretary, told the Irish Farmers Journal that the the situation was “deeply concerning”.
“It’s deeply concerning – selling loans to third parties who probably have a poor understanding of the track records of farmers dealing with debt over the long term.
“If a farmer gets a loan to develop his farm, he will want to be able to pay down that loan over a 7-15 year period, and if an issue arises – which is happening increasingly with farm income volatility – you would be hoping for the opportunity to negotiate, to make an agreement to push it out another year or so. That’s only doable where you have a bank that’s invested in the long-term interest of the business.
Meanwhile, ICMSA president John Comer said he wanted to see fair play with banks.
“We don’t like to see these threatening cases, and farmers involved here need the full protection of the legislation that’s available.
“Agriculture has always had a good track record in credit, and banks must be fair and reasonable in that sense. If loans ultimately have to be restructured then there shouldn’t be penal consequences,” he told the Irish Farmers Journal.