Donegal Fianna Fáil TD Charlie McConalogue has said the sale of SMEs loans held by Danske Bank highlights the dangers businesses in Donegal are facing when dealing with debts and credit access. His comments follow reports that the bank is planning on selling off over €500m of SME loans to a vulture fund.
Deputy McConalogue has said: “The problem of legacy debt held by the SME sector is the forgotten crisis in the Irish banking sector and businesses in Donegal are still having difficulties accessing credit and managing heavy debts. It’s been reported in the media that Danske Bank is planning the sell off to a vulture fund over €500m worth of SME loans across 4,000 different customer accounts.
“If the loans held by businesses in Donegal are sold on to an unregulated third party they could be under huge pressure with repayments. Many towns across the county have been ravaged by the economic downturn, with boarded up shop fronts and businesses a common sight. Those who have managed to keep afloat are now being faced with a new challenge, which could be prevented if the Government moved on the issue.
“My party’s Finance spokesperson Michael McGrath has repeatedly called for the Sale of Loan Books to Unregulated Third Parties Bill to be published, and for its passage through the Oireachtas to be accelerated. The Government has let the issue of SME debt slip down the political agenda. Now that the economic situation in Dublin has begun to stabilise and improve, the issue has dropped off the priority list. However, it remains a very real problem for businesses in this region, who are still struggling to remain viable in tough economic circumstances.
“The possibility of Danske Bank selling off its loan book to unregulated vulture funds has created an air of unease and concern amongst the Donegal business community and mortgage holders alike. They’re fearful that they’ll lose their statutory protection once these third party entities take over their loans, which could result in changes to the terms and conditions in their contracts”, he continued.
“The Government needs to act swiftly to address the issue of unregulated vulture funds buying Irish mortgages and loans from banks. The problem garnered significant attention in the Oireachtas and in the media earlier this year, but seems to have fallen off the agenda in recent months. However, it still poses a major threat to homeowners and businesses in Donegal and I would urge the Government to move without haste to ensure that Irish loans are protected”.