Jim O'Keeffe (Cork South West, Fine Gael)

One of the worst outcomes of the NAMA legislation could be a situation in which credit was being restricted or prevented from flowing by the banks. In essence I refer to the possibility of the banks using and abusing the NAMA legislation for their own purposes, strengthening their positions and ignoring the imperative to ensure credit is flowing. There is some evidence of this already. The banks have been using the time during which the debate has taken place for the purpose of restricting credit, of making new arrangements with their customers on more onerous terms and generally manoeuvring themselves into a situation in which they are the winners in all of this affair. However, the job needed for the country is not being implemented and this is why the guidelines will be essential.

I refer to one aspect of the guidelines and I call on the Minister to take it on board. This matter was referred to in the Seanad last night and I reiterate my support for it. NAMA holds or will hold a security on acquired performing bank assets. That is an essential point. If such bank assets are performing and not in arrears then the participating institutions should not be precluded from relying on that security to issue new or commercially sound loans to individuals or, more likely, to corporate bodies. It would be unjustly prejudicial to prevent participating institutions from relying on such a security.

I have strong reason to press this case because I am aware of a company which has operated in the south for the past 50 years. It has been a viable company and has paid its dues. Last year, it paid €14 million in taxes to the Revenue. It has an arrangement with a bank and the bank is now tossing the ball between it and NAMA. The bank states the preferred arrangements cannot go ahead without clearance from NAMA and without prior written consent. On the other hand, the NAMA position is that no such clearance is necessary from it, provided the money involved and the credit agreed is not for working capital. I foresee a danger in this case and this company may be caught in the crack between the banking institution and NAMA. It may find itself forced into a very difficult situation, possible liquidation, with 300 jobs at stake. This is a viable company. There is a danger because the banks may try to use this situation solely for their own benefit and to build up their capital. If that happens, NAMA will be a disaster.

This is why I support the points raised by my colleague, Deputy O'Donnell, and I highlight this particular case to the Minister. I do not intend to quote the detail in public but I seek for the details of this case to be examined by the Minister and NAMA to ensure the outcome to which I referred will not unfold. There is a danger this viable company will be left swing as a consequence of the legislation to establish NAMA, which will provide vast support for the banks. The banks may end up using the support for their own purposes.

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