Lobby group defend banks' sale of customer loans to vulture funds

Lobby group defend banks' sale of customer loans to vulture funds

One of the chief lobby groups for the banking sector has defended the controversial and divisive practice of the State's main lenders selling non-performing loans - or NPLs - to so-called vulture funds.

The Banking and Payments Federation of Ireland (BPFI) - which is headed up by former Minister of State at the Department of Finance and Fine Gael MEP Brian Hayes - has said that such sales to third party investment funds provide "benefits for banks and protection for borrowers".

In a detailed report on the subject, which the BPFI said should address "false claims" around NPL sales, the organisation said borrowers do have the same protection under new ownership, vulture funds do put repayment arrangements in place for borrowers and that such sales will not lead to a "tsunami" of house repossessions.

"We know from talking to various firms, on both sides of the NPL sales process, that the process is delivering workable solutions for lenders and borrowers alike," said BPFI chief economist Ali Ugur.

Mr Hayes said the extent to which the main banks are eradicating NPLs from their balance sheets "is good not just for banks but for the wider economy which depends on banks for personal and business lending."

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