The Central Bank is being called on to ensure that credit facilities for Ulster Bank’s farmer customers are protected as the bank withdraws from the Irish market.
The Irish Cattle and Sheep Farmers’ Association (ICSA) said this morning (Friday, February 26) that it is “particularly concerned about the potential impact on short and medium term facilities”.
Tim Farrell, the association’s rural development chair, highlighted that farmers with stocking loans and overdrafts rely on those facilities for everyday farm activities.
It is vital that these facilities are safeguarded for farmers.
“Assurances must be given that farming customers of Ulster Bank will be able to access similar short term loan facilities as they move to other banks. Such credit facilities are absolutely critical, particularly for drystock farmers, and in many cases make the difference between being able to continue in business or not,” Farrell said.
The ICSA said it was “reassured” after a meeting with the Financial Ombudsman that term loans which are sold on are still subject to the same terms and conditions.
“However, the reality is that many loans have small print conditions that leave borrowers vulnerable, particularly when they are trying to establish a relationship with a new bank,” Farrell warned.
The long-standing ICSA policy is that we are totally opposed to loans being sold to vulture funds without the borrower’s consent.
The ICSA rural development chair welcomed the move from AIB and Permanent TSB to acquire commercial and small business loan portfolios from Ulster Bank’s parent NatWest.
“This is an important development, and every effort must be made to ensure that these loan books do in fact end up with Irish pillar banks, and not with vulture funds,” he stressed.
Notwithstanding this, Farrell argued that “we need to go further to protect” farmers with borrowings from Ulster Bank and those with current account facilities.
To this end, ICSA is calling on the Central Bank to ensure that there is no change in the availability of stocking loans or overdraft facilities to individual farmers.
“We do not want to see a farmer being offered a lower overdraft or have stocking loans withdrawn because of the transfer of accounts to [other banks]. Existing credit arrangements must be protected as a condition of this changeover,” he concluded.