‘Vulture funds buying loan books must respect borrower’s rights and contract’

The sale of loans from one entity to another does not change the terms of the contract or the borrower’s rights and obligations under the original contract, the Minister for Agriculture has said in response to questions about vulture funds buying Irish loan books.

Answering questions from Sinn Fein’s spokesperson on agriculture, Martin Kenny, Minister Michael Creed said the sale of any such loans, including the ongoing sale of €100m of agricultural loans, is the responsibility of the Department of Finance and it has been in touch with that bank.

However, he also said that active engagement by indebted borrowers with their lender is key to achieving a sustainable resolution and urged borrowers in arrears who have not already done so to take that first step by contacting their lender directly or contacting the Money Advice and Budgeting Service, MABS.

“In regard to the consequences for agriculture, my predecessor, Deputy Coveney, wrote to the bank in early April to express his concerns.”

The bank replied that a low number of agricultural customers were potentially affected by the sale and that it has pro-actively engaged and worked with such customers.”

He said that the bank had said that any potential sale of non-performing SME loans would only be done after the completion of an extensive review of each customer’s individual circumstances.

“The bank gave assurances that throughout this process it remains fully committed to supporting all of its customers, including those in the agriculture and food sectors.”

The Minister also said that his officials have been in contact with the bank in question on a regular basis with regard to sale of these loans and that he will meet the CEO of the bank later this month and this issue will be one of the topics on the agenda.

Deputy Kenny said debt may put large amounts of farmland under the hammer and allow it to fall into the hands of vulture capitalists and this should not be allowed.

“Many of the people affected are seriously concerned that this agricultural land, which is valued at up to €100m, will go out of the hands of people living in the State and be bought by vulture capitalists from other countries.

“Agricultural land that belongs to the people of Ireland should remain in Ireland. Everything should be done to ensure that the land is kept in the hands of the people who currently own it.”

Minister Creed quoted Shakespeare in his advice that “Neither a borrower nor a lender be”, but also said his approach will be to assist, in so far as he practically can, farmers who are in that situation.

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