In the December 2009 budget, the Minister for Finance announced that a simple and effective review process would be set-up for small and medium-sized enterprises (SMEs), sole traders and farm enterprises that have been refused credit from banks participating in the NAMA scheme, and to examine credit policy to assist the Minister in deciding what further actions may be necessary to increase the flow of credit.
The Credit Review Office has been established to conduct this review process and will accept applications from SMEs, sole traders and small and medium-sized farm enterprises that have had their application for credit refused or reduced or have had credit facilities withdrawn, and feel that the bank’s decision is unjustified. The Credit Review Office will, on application from the borrower, carry out an independent and impartial review of the bank’s decision.
The review process will review decisions to refuse, reduce or withdraw credit facilities (including applications for restructured credit facilities) from €1,000 up to €500,000. Each review will only apply to a specific declined credit application up to €500,000 and not to any other borrowings which may exist. Therefore, applicants who may have total borrowings above this limit are not excluded from the review process.
The Credit Review Office review process will operate after the borrower has unsuccessfully appealed through the bank’s own internal appeals process. All participating banks are required to review their loan appeals policy and ensure that borrowers are made aware of their right to an internal appeal of an unfavourable lending decision.
The enabling legislation is Section 210(1) (b) of the National Asset Management Agency Act 2009
relating to the review of decisions of participating institutions to refuse credit facilities.
At present, the participating banks are those engaged with NAMA:
- Allied Irish Banks
- Bank of Ireland
- Anglo Irish Bank
- EBS
- Irish Nationwide Building Society
Other banks may opt to enter the review process voluntarily.
The Credit Review Office has no regulatory or mandatory powers over the opinions it gives on applications. However, the outcomes of the appeals will be collated into a regular report for the Minister for Finance to inform the Government how the credit system is operating in the participating banks.