29 March 2016
Irish Cattle and Sheep Farmers’ Association (ICSA) rural development chairman Seamus Sherlock has expressed alarm at the trend of selling loan books to vulture funds. “There has been a lot of concern expressed at the Ulster Bank decision to sell some of its loan book which has had an impact on some farmers. However, even more disconcerting are rumours that another one of the major Irish banks is on the brink of selling a significant amount of debt to a so-called vulture fund.”
Mr Sherlock said that the main banks need to think long and hard about these decisions. “Banks should have a long-term view about their business with key customers such as farmers. Selling loans to vulture funds can only have a negative impact on the sentiment towards the banks and it does not fit easily with the ambition to do more lending business in the future to farmers.”
“I recognise that the banks have the right to sell on their loan book or parts of it but I am keen to ensure that the transferee of the debt will always be bound by the same stringent regulation as imposed by the Central Bank on resident Irish banks”, said Mr Sherlock.
“Stories of sales of debt to foreign speculators at prices well below the book value are rife and ICSA is keen to establish the position in relation to these sales and also about rumours which abound regarding an imminent sale of debt by one of the larger Irish banks.”
“ICSA has always stood for fair play”, continued Mr Sherlock. “I am keen that at the very least where the borrower is a private individual trying to hold onto his or her family farm they should be given the opportunity to redeem the loan at the same figure as that for which it is being offered to the vulture funds. However, even more important is to give people, who are keen to find a resolution, every opportunity to negotiate a realistic outcome over the long-term.”
ICSA is meeting with the Financial Ombudsman in the coming weeks to discuss these issues and to find a way to ensure that farm families in particular are not put in a more disadvantageous position.