Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

260. To ask the Minister for Finance the criteria used by the banks in each of the years 2009 to 2016 and to date in 2017 whereby a hire purchase loan could be sold to vulture funds at a discount; the type of calculation or formula that was used to determine that a loan was impaired and that it could be sold to a third party; if the Central Bank monitored or issued parameters whereby hire purchase loans could be deemed to be impaired and sold to a third party; and if he will make a statement on the matter. [47025/17]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The ability to sell loans to a third party is governed by the original contract between the lender and the customer and I do not have the data requested by the Deputy in respect of individual banks.

If a borrower has a difficulty with interpretation by a particular lender, I should point out that the Financial Services Ombudsman can investigate complaints from individual consumers about the actions of hire purchase firms and I would urge a customer who may have a complaint about such a firm to make a complaint to the FSO if the issue cannot be resolved with the firm concerned.    

I understand from the Central Bank that the impairment of any exposure on a Bank’s balance sheet is governed by the relevant accounting standard. The Central Bank of Ireland issued guidelines in 2013, entitled ‘The Central Bank of Ireland Impairment Provisioning and Disclosure Guidelines’ which cover regulatory expectations regarding the policies, procedures and disclosures which the State supported Covered Institutions should adopt for loans and receivables financial assets (and held to maturity financial assets, where applicable) that are subject to impairment review in accordance with the requirements of International Accounting Standard 39 Financial Instruments: Recognition and Measurement (“IAS 39”).

It is also important to highlight that the transfer of a loan from one entity to another does not change the terms of the contract or the borrower's rights and obligations under the original contract.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

261. To ask the Minister for Finance the number of hire purchase loans that were sold to third party unregulated vulture funds annually in each of the years 2009 to 2016 and to date in 2017 by a bank (details supplied) or other companies associated with or to the bank; the value of these loans annually, in tabular form; and if he will make a statement on the matter. [47026/17]

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

262. To ask the Minister for Finance the number of hire purchase loans that were sold to third party unregulated vulture funds or other third parties annually in each of the years 2009 to 2016 and to date in 2017 by a bank (details supplied) or other companies associated with or to the bank; the value of these loans annually, in tabular form; and if he will make a statement on the matter. [47027/17]

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

263. To ask the Minister for Finance the number of hire purchase loans that were sold to third party unregulated vulture funds annually in each of the years 2009 to 2016 and to date in 2017 by a bank (details supplied) or other companies associated with or to the bank; the value of these loans annually, in tabular form; and if he will make a statement on the matter. [47028/17]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 261 to 263, inclusive, together.

Officials in the Department of Finance have received the following responses from the banks in relation to the Deputy’s questions:

AIB:

“Hire Purchase agreements have not been a feature of loan portfolios sold to date.

Due to the nature of the contract involved, assets financed in this manner remain the property of the Bank until such time as the agreement has been successfully completed. Hence the resolution of instances where the Bank cannot agree a repayment solution with the customer will typically involve the recovery and disposal of the asset.”

BOI:

“As a publicly listed company, Bank of Ireland makes all appropriate disclosures to the market in relation to all operational matters. All Annual and Interim Reports, and other market disclosures, are available at the following link:” .

PTSB:

The bank responded that no such transactions took place. For clarity, the bank did confirm that it did sell its PTSB Finance business in 2012, which included c. €21m of hire purchase loans (2,865 customers), to Consumer Auto Receivables Limited which was an SPV backed by Deutsche Bank.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

264. To ask the Minister for Finance the number of hire purchase loans that were sold to third party unregulated vulture funds annually in each of the years 2009 to 2016 and to date in 2017 by a bank (details supplied) or other companies associated with or to the bank; the value of these loans annually, in tabular form; and if he will make a statement on the matter. [47029/17]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There is no agreement on the precise meaning of the term “vulture funds” and it has come to have pejorative connotations.  I presume that the Deputy is referring to private equity funds.  The Deputy will be aware that international private equity funds invested much needed capital in our economy during a period of high risk and uncertainty. 

In this regard, the only sale of agreements during the period requested, relating to Ulster Bank Ireland DAC or a company associated with Ulster Bank Ireland DAC, was by Lombard Ireland Limited in 2012.  9,870 agreements with a gross value of approximately €216 million were sold to a third party. 

The requirements of  the Consumer Credit Act 1995 still applied to the agreements that were sold and approximately half of the agreements related to Hire Purchase Agreements. In 2016, Lombard Ireland Limited transferred all their remaining agreements to Ulster Bank Ireland DAC.