Plans for NAMA to spend €2.5bn on professional fees ‘crazy’

PLANS for NAMA to spend €2.5 billion on professional fees were denounced as “crazy” in the Seanad yesterday.

Independent Senator Fiona O’Malley attacked the move to “fork out” such a huge amount at a time when the Government was seeking €4bn in spending cuts.

The former PD TD said it was “little wonder” professionals were rushing to give their backing to the assets management agency as it had such a large fees base.

The comments came as the NAMA Bill was clearing one of its final Oireachtas hurdles in the Seanad. Finance Minister Brian Lenihan came under pressure from a Fianna Fáil senator to use NAMA to launch a rescue package for the 35,000 families facing repossession next year due to mortgage defaults.

Senator Larry Butler said banks needed a “social conscience” element to prevent the need for a second NAMA to clear up the debt mess left by defaulters.

Mr Butler said an extended moratorium on payments or a system allowing troubled mortgage holders to rent their houses from the banks was needed.

Mr Lenihan he consistently refused to use the NAMA Bill to bail out mortgage defaulters.

However, in an address to the upper house he did indicate he is considering setting up an appeals system for firms refused loans by banks covered by NAMA.

A number of complex amendments are to be added to the NAMA Bill before it returns to the Dáil for final approval.

The delay in tabling amendments was criticised by the opposition, which claimed the Government was producing the legislation on the hoof.

A controversial tax surcharge on bank profits to cover any potential losses on the NAMA operation is among the amendments, replacing the plan to levy the banks if NAMA made a loss.