Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I understand the Minister's point about the impact of what is proposed in a situation where a credit agreement is not in financial difficulty but is restructured for business development purposes. However, the point I made was related specifically to the original loan agreement. I am aware that it is not possible to vary a loan agreement without agreement. Often, despite the fact that people have read the conditions outlined in the small print, they will have missed the point that a loan can be recalled at short notice, which is regularly the case. Most people, to their detriment, sign agreements in the belief that while this is standard banking practice, once they meet the conditions of their loan this punitive provision will not be implemented. In the normal course of events it will not be implemented and banks are happy to have loans repaid in the normal way taking into account the fact that if they get a bad name, they will not get new customers.

My concern is that, notwithstanding the conditions attached to the original loan, some of the vulture funds acquiring these loans books are doing so in order to take ownership of assets. In many situations, because loans are being written down by a figure of 50% to 70%, the asset value is greater than the discounted value of the loan. These vulture funds have no interest in the loan being repaid. All they are interested in is seizing the assets as quickly as they can, which they may be entitled to do by law under the original agreement, resulting in the closure of the business. This is an unsatisfactory consequence of the sale of loan books to people who have no vested long-term interest in the economy.

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