ICMSA president John Comer
Following a meeting with the Central Bank, ICMSA has confirmed that that the bank has agreed to consider issuing a specific guidance document to assist farmers whose loans have been acquired by so-called vulture funds.
The farm organisation had specifically requested the meeting to raise what its president, John Comer, described as the “deep concern” felt by those farmers who had discovered – and usually only after the fact – that their loans and farm finance arrangements had been sold or transferred to vulture funds.
Mr Comer said that huge disquiet had been caused by these situations where farm financing and loans had been arbitrarily classified as “distressed” and sold on to these specialist finance companies who, it was felt, operated on a business model that was radically different to that used by traditional banking.
"Put very bluntly, which was the way we put it to the Central Bank, farmers feel that traditional banks in many cases want and understand farm business and have a vested interest in a farmer working his or her way through a distressed loan. That is most assuredly not the situation for some of these anonymous vulture funds who seem to operate on the basis that the sooner they can finalise a loan the better it is for them. They do not seem to have the same concern for keeping clients going through what may be temporary difficulty and the suspicion is that, quite often, they’re looking for an opportunity to compound the problems being experienced by the farmers in question," said Mr Comer.
“ICMSA has been looking at this closely for some time and while we’re very aware of the regulatory limits of a guidance document, it’s a start and a step in the right direction that will at least show some of these new arrivals that a certain standard is expected of them and where they fall short of those standards, ICMSA will very promptly draw the attention of the relevant authorities to that shortfall. Farmers need to know their rights in this regard and the ICMSA proposal for a specific guidance document for farmers in setting out their rights in relation to dealing with vulture funds is important and we’re confident that the Central Bank will implement this proposal,” he said.
In relation to access to competitively priced finance, ICMSA set out a number of barriers to competition including the cost of liens and asked the Central Bank to examine ways to allow greater competition within the banking sector.