Approximately 200 Irish farmers are affected by the Ulster Bank decision to sell-off part of its agri loan book to ‘vulture funds’, according to ICSA’s Rural Development Committee Chairman Seamus Sherlock.
This is an extremely worrying development, as it further weakens the position of farmers when it comes to dealing with financial institutions, he said.
“We have spoken to the Financial Ombudsman on this issue and have been assured that such transactions do not affect the legal rights of the farmers involved.
“However, our concern is centred on the small print contained within the financial agreements which farmers may have originally signed up to.”
Sherlock said that the bigger picture concerns the fact that a significant number of Irish farmers now find themselves no longer dealing with a pillar bank.
Vulture fund investors have no allegiance to Irish agriculture. In most cases they are only interested in making a quick profit from the distressed loan books they acquire.
Sherlock said that the farmers affected by the Ulster Bank sell-off may have been having difficulty keeping up with their original loan repayments.
“But this is not a reason for them being treated in such a manner.”
The ICSA representative did admit that, in some cases, there could be an upside to the Ulster Bank decision.
“No doubt, the bank sold off the loans in question at a discounted rate. This opens up the possibility of the farmers involved, negotiating a reduced repayment deal regarding the amount of money outstanding.
“But, invariably, this will require the farmers having a pot of money to draw down from in order to make this possible. In the vast majority of cases, this will not be an option.”
Sherlock said that ICSA can provide advice to farmers caught up in the Ulster Bank decision.
“Our staff will be available to discuss the details of individual cases with the farmers involved.”
Ulster Bank was unavailable for comment.