Michael Noonan (Limerick City, Fine Gael)

I thank Senator Daly for introducing this Bill. It gives Seanad Éireann an opportunity to debate the issues and it gives the public another insight into the workings of NAMA. The proposals in this Bill have been considered and it has been concluded that the Bill as initiated would place these bodies at a competitive disadvantage to other institutions disposing of assets. Were these proposals to be implemented they would undermine the commercial mandate of NAMA and IBRC. Implementation of the policies in this Bill would also be likely to leave these bodies open to constitutional and other legal challenges.

The two substantive provisions in this Private Members' Bill would require NAMA and the IBRC to display various details relating to their assets on proprietary websites. The level of detail seems to be primarily intended to generate awareness of assets that are to be sold and reveal the likely sales prices for those assets.

The Bill also proposes that NAMA and the IBRC would publish the achieved sales prices for all relevant disposals on those same websites.

The obligations proposed in the Bill would lead to negative financial impacts for the taxpayer. It would reduce the expediency of asset disposal and the value that could be realised, and obstruct the efforts of the institutions to secure the optimum return for the taxpayer. The Bill would most likely give an advantage to property market funds and developers at the expense of the taxpayer. Clearly this would not be desirable. The Bill is clearly at variance with the NAMA and IBRC legislation which established the entities and which governs the conduct of their respective businesses.

Sections 3 and 4 of the Bill specifically propose the publication of debtor-specific information, including details of debtor properties. This would work contrary to the intent of the NAMA Act 2009, which provides for NAMA to make a return for the taxpayer on the loans it has purchased, and is also contrary the normal rules of banking confidentiality which apply to NAMA's debtors and continue to apply to IBRC customers. In relation to the work of both the IBRC and NAMA, the Government's primary concern is ensuring a commercial return for the taxpayer. While the need for transparency is recognised, there is a commensurate need to ensure that these bodies can operate in a commercial manner. It is, therefore, in the public interest to ensure that neither NAMA's nor IBRC's commercial mandate is undermined.

The proposed Bill also has the potential to reduce the number of bidders for property and could be particularly damaging in the cases of sale of larger assets where bidders could be relatively few and therefore more easily identified. I am particularly concerned about the latter aspect and the risk that publication of the price achieved on a property would give rise to collusive behaviour on the part of purchasers of similar assets. As a direct result, the Bill would likely have the consequence of leading to gains for international property funds at the expense of the taxpayer.

There is a contractual duty on both IBRC and on NAMA to respect the right to confidentiality which debtors of financial institutions enjoy. Such contractual obligations also apply to NAMA by virtue of the contractual arrangements entered into by participating institutions with their customers and which remain in force by virtue of section 99 of the NAMA Act as it provides that, on acquisition of a loan, NAMA takes over the obligations of the participating institution under the loan. Furthermore, in the case of property under the control of NAMA's debtors, the agency is precluded, under section 202 of the NAMA Act 2009, from disclosing confidential information, which is specifically defined to include information relating to debtors. Information about individual debtors or guarantors is also protected against disclosure by the Data Protection Acts which apply to both NAMA and to IBRC.

In drafting the NAMA legislation, it was decided that safeguards protecting the existing contractual arrangements would be required in the NAMA legislation. The general position taken was that the debtors' rights and obligations would not be changed and that NAMA would assume the position of the participating institution, thus ensuring that the rights and obligations of debtors remain unchanged by the NAMA legislation.

Given the wide array of legislative and case law protection currently available to debtors of both NAMA and IBRC, I consider that there would be a substantial risk of constitutional challenge by any enactment which requires the disclosure of a debtor's identity-----