At yesterday’s launch of the office – which was established by Finance Minister Brian Lenihan in last December’s budget – the new Credit Reviewer, John Trethowan, said his mission was to ensure the credit supply systems were working correctly, but that his role will be an impartial one.
The Review Office’s remit will initially just cover loan applications with a maximum value of €250,000 and those relating to the five NAMA-bound institutions, although that could be extended to other banks in the future.
If borrowers feel their loan applications have been unfairly responded to, they can appeal via the relevant bank’s appeal process. If that proves unsatisfactory, they can apply for that decision to be reviewed by the Credit Review Office.
Despite not having statutory powers, Mr Trethowan said the banks – specifically AIB and Bank of Ireland – have co-operated with him and supported his role.
He said that although the banks’ lending activities are ultimately their prerogative, they will need to offer a full explanation if questioned by his office. They will not simply be able to disagree with any of his decisions which go against them.
Mr Trethowan added that his office will publish quarterly reviews of its findings to the Department of Finance.
The small firms’ lobby group, ISME – which, along with the IBEC-affiliated Small Firms Association, has already met with Mr Trethowan – yesterday cautiously welcomed the establishment of the body.
“Anything set up to help an increase in SME lending is welcome. But, while this is a step in the right direction, the fact that the new office doesn’t have statutory powers is a difficulty and the concern is that it will be merely an overseeing monitoring body, as a result. We don’t see this as the be all and end all in getting the banks lending, but it’s part of the wider process in towards doing that. Ultimately, the banks cannot be left to their own devices on this issue,” said ISME’s head of research, Jim Curran.
Mr Lenihan said this week that the SME sector’s lending targets of €12bn over the next two years will be met.