THE CENTRAL BANK does not keep stats on how many business loans are owned by vulture funds.
That is according to a Dáil response from Finance Minister Michael Noonan received by Fianna Fáil finance spokesperson Michael McGrath.
McGrath asked Noonan “if his department or the Central Bank has a record of the number of commercial loans that have been sold on by the original underwriter and if so, the details”.
Noonan responded that SMEs are protected by the Consumer Protection Act (2015), but that the figures are not kept.
“I have been informed by the Central Bank that it does not maintain a record of the number of commercial loans sold on by the original underwriter. Portfolio sales are considered as part of normal supervisory engagement where they are sufficiently material.
However, the Deputy will be aware that legislation and regulations have been implemented by the Oireachtas and Central Bank to protect SMEs when dealing with regulated and unregulated firms.
McGrath said that the situation was “incredible”.
“A typical SME loan agreement is stacked so heavily in favour of the lender that, in many cases, it is relatively easy for the loan owner to trigger a default and call in the loan. This can result in the collapse of a going concern business and the loss of many jobs as a result.
It is incredible that the Central Bank has no record of the number of business loans that have been sold on to ‘vulture funds’. An SME could find that its loans have been bought by pretty much anyone who merely has to appoint a credit servicing firm to comply with the existing law.
“It is vital the Central Bank collates this information so we can measure the outcomes when loans are sold in this way.”
To embed this post, copy the code below on your site
have your say