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Government intervention in a proposed sale of loans to vulture funds is impossible under the current law, according to Minister for Finance Paschal Donohoe.
“I can’t interfere in any individual decisions that boards make,” Minister Donohoe said, responding to a question on RTÉ on the proposed AIB loan sale to so-called vulture fund Cerberus.
AIB has stated that a ‘limited’ number of farm loans will be included in the sale.
In a previous loan sale, Ulster Bank sold a number of farm loans to the US-based vulture fund Cerberus.
An increasing number of farmers who had their loans sold by Ulster Bank have contacted the Irish Farmers Journal reporting that Cerberus and their agent Link Asset Services are difficult to deal with and inflexible in negotiating on debt.
Non-performing loans
However, banks are under an obligation from the EU to deal with the high level of non-performing loans (NPLs) on their loan books.
The minister pointed out that holding onto NPLs had a negative effect on other bank customers.
“The other thing that I’m aware of is the level of non-performing loans that exist does create a cost that other people pay for,” Donohoe said.
The IFA has insisted that family farms should not be included in any loan sale, and has asked farmers and auctioneers to avoid farm sales where it’s known that the farmer has refused permission for the sale.
It is hoped that legislation to help regulate vulture funds will be introduced this year.
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