Written answers
Tuesday, 1 May 2012
Department of Finance
Credit Review Office
9:00 pm
Michael McGrath (Cork South Central, Fianna Fail)
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Question 211: To ask the Minister for Finance if he is satisfied with the operation of the credit review office; and if he will make a statement on the matter. [21876/12]
Michael Noonan (Limerick City, Fine Gael)
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The Credit Review Office (CRO) was established under Section 210(1) (b) of the National Asset Management Agency Act 2009 and commenced operations in April 2010. The CRO reviews decisions by the pillar banks to refuse, reduce or withdraw credit facilities (including applications for restructured credit facilities) from €1,000 up to €500,000. Each review will only apply to a specific declined credit application up to €500,000 and not to any other borrowings which may exist. Therefore, applicants who may have total borrowings above this limit are not excluded from the review process. The tables below illustrate the activity of the CRO up to 29 February 2012, the date of the most recent CRO quarterly report.
| Application Rec'dbut held at Officeuntil eligibilityconfirmed withBank | Overturned by InternalAppeals/ got credit* | Abandoned /Withdrawn by customer** | Application Receivedand proceedingthrough Reviewprocess | CRO Decision | Total | |
| Banks' CreditDecision Upheld | Bank's Credit DecisionDisputed / BankSubsequently Provided Credit More work required by Borrower and Bank or withdrawn by customer | |||||
| AIB | 4 | 6 | 6 | 4 | 23 | 27878 |
| BoI | 4 | 7 | 6 | 5 | 20 | 26775 |
| Total | 8 | 13 | 12 | 9 | 43 | 5315153****only tracked since May 2011-new procedures |
**considered withdrawn/abandoned if no response after 6 months
***includes applications awaiting eligibility confirmation
| FormalAppeals | Banks' Credit Decision Upheld | Jobs at risk | Bank's Credit DecisionDisputed / Bank Provided Credit | Jobs protected |
| Total Numbers | €3,798,553 | 228+22p/t | €4,747,000 | 521+21p/t |
| AIB | €1,803,200 | 131+9p/t | €2,258,300 | 218+9p/t |
| BoI | €1,995,753 | 97+13p/t | €2,488,700 | 303+12p/t |
Another function of the CRO is to assist my Department in monitoring the progress of the pillar banks in achieving their lending targets. In his fifth quarterly report of August 2011 the Credit Reviewer stated that it would be a challenge for each of the banks to reach their €3bn sanction target for new and restructured facilities. Following publication of the report, some robust meetings took place between the CRO, the Department of Finance and the pillar banks, which resulted in increased lending activity in the following two quarters and the annual targets being met.
The main aim of the CRO is to ensure that credit is not refused to viable businesses with valid credit propositions. Insofar as this aim is concerned, I consider that a satisfactory solution has been found in all cases. I would also advise the Deputy that the Action Plan for Jobs 2012 contains a commitment to assess the CRO to ensure SMEs are getting the support on bank lending they require. It is intended to commence this process shortly.
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