Action to deal with vulture funds will be a top priority for Fianna Fáil – McGrath
13 March 2016
Fianna Fáil Finance spokesperson Michael McGrath has identified protection from the vulture funds for SMEs mortgage holders and tenants as a top priority for Fianna Fáil in the new Dáil.
Deputy McGrath commented “Today’s Sunday Business Post report that 200 families are facing eviction as a vulture fund moves against a developer. There is now little doubt that we are going to see more of these developments in the months ahead unless concerted action is take.
“Clearly vulture funds feel that there is limited sanction in the law as it currently stands to prevent them putting SMEs into receivership or seeking repossession of family and buy to let properties.
“We have already seen vulture funds use underhand tactics to trigger default on the part of borrowers in an attempt to gain control of very valuable assets. There is a real risk now that action of this type will be stepped up once these funds feel that the political backdrop is more favourable for them.
“Legislation that was passed last year was entirely inadequate as it focused on those who are servicing debts on behalf of vulture funds. Vulture funds who outsource the administration of loans still control key decisions such as initiating action for repossession or raising the interest rate that applies to the loan without actually being subject to regulation.
“This leaves a dangerous gap in the legislation. There is also very legitimate concern that loans may be sold more than once with each subsequent transaction resulting in a deterioration of the conditions of the borrower in respect of the interest rate, penalty charges and the status of any restructuring arrangement.
“The new Dáil must amend the legislation to ensure that any borrower who has entered into a restructuring arrangement and who is sticking to it, cannot have that payment structure cancelled by the acquirer of a loan or an agent operating on their behalf,” concluded Deputy McGrath.