There’s a fair stir around legislation passed just before the summer recess covering a range of civil law issues.

Basically, it gives the same status in law to evidence from a variety of financial institutions that was previously only afforded to banks.

High among these is the admissibility of “hearsay” evidence in cases where such institutions, including vulture funds, pursue borrowers through the courts.

Vulture funds are not regulated in the same way as banks, but are now benefitting from similar provisions in law

At the time, both opposition parties and independent TDs raised questions.

Almost two months on, those questions aren’t going away.

Vulture funds are not regulated in the same way as banks, but are now benefitting from similar provisions in law.

It eases the way for them to chase loanees’ assets. This, in turn, weakens the hand of the borrower to achieve a negotiated settlement with the vulture fund.

Necessary evil

The vulture funds’ presence in Ireland has been divisive from the start.

With European legislation defining any loan that is 90 days or more behind as a non-performing loan (NPL), all Irish and European banks must limit the proportion of NPLs on their books.

Following the crash, it was decided to allow in companies that specialise in buying distressed loans from banks and building societies and realising their value – so-called “vulture funds” – financial scrappage yards.

Critics say it’s a double whammy for “Ireland inc”. Firstly, an Irish bank takes a haircut on a loan when selling it to the vulture fund. This shortfall is picked up by the taxpayer, through the banking bailout, and again by the high banking costs as banks work their way back into financial strength.

In the background, there are murmurings around the presence of Brian Hayes at Clifden’s Golfgate

Secondly, the (Irish) borrower pays the vulture fund a multiple of what the loan cost the vulture fund to purchase, seeing further wealth leak out of the country.

Others holding the vulture fund can do deals with debtors the banks could never agree to.

In the background, there are murmurings around the presence of Brian Hayes at Clifden’s Golfgate. On one level, as a former TD, Minister of State, and MEP, his attendance was understandable, if unwise in the light of Covid-19 guidelines.

His current job is as CEO of the Banking and Payments Federation of Ireland. This is the representative body for Ireland’s banks and financial institutions.

Since the Clifden dinner, there have been constant questions and rumours that prominent vulture fund representatives were there, socialising with lawmakers.

The controversial “hearsay” provisions were passed into law a month before Golfgate, but it all fuels a public suspicion that an inner circle is operating to its own agenda.