1. I have an account with a non-NAMA Bank, can I apply to have my credit application reviewed?

The Credit Review Office was established under section 210 (1) of the National Asset Management Agency Act 2009 relating to the review of decisions of participating institutions to refuse credit facilities.

 

This meant that the Credit Review Office only had a mandate to offer the appeals service to customers of the banks in the Nama scheme.

However since then Ulster Bank and PTSB have opted to join the review process voluntarily.

So at present the four banks that are active in the SME lending space and are part of the Credit Review Office process are AIB,BOI, PTSB and Ulster Bank.

2. I have an account with a bank in the NAMA scheme and was refused credit some weeks ago. Can I use the Review Process now?

The borrowers application form must be submitted to the Credit Review Office within 28 days of the bank’s internal appeal decision to decline or reduce facilities.

 

3. Is the opinion of the Credit Reviewer binding on the bank?

No. The Credit Review Office has no statutory or regulatory powers. However, in practice where the Credit Review Office has supported the borrower application and recommended the lending should be made, to date the banks have respected our opinion and complied in over 90% of cases.

Once a case has been reviewed the Opinion will be communicated to the the bank and the borrower. If the opinion is that the application is deemed creditworthy, the bank will be asked to comply, or to explain their decision not to lend within five working days of being informed.

Ultimately it is a matter for the banks’ own Boards and Credit Committees to decide what loans to take onto their balance sheets.

Each of the banks has entered into a Code of Conduct for Business Lending to Small and Medium Enterprises, with the Financial Regulator. Details of this code which is legally binding on the banks can be found at:

Code of conduct for business lending to small and medium enterprises

 

4. How does the Credit Review Office assess the application.

The review process is carried out by a de facto credit department staffed by a team of experienced lenders in SME and farm lending, and an accountant with commercial evaluation skills from the public sector joins all assessment committees. Where the Office is unable to support the borrower’s appeal, the opinion is further overviewed by one of a further panel of non bankers, made up of experienced professionals familiar with SME and farm businesses

5. I have been refused credit but my application falls outside the criteria, either by amount or business size, stated on the webpage, can I still apply?

No. The Credit Review Office has been established under section 210 (1) of the National Asset Management Agency Act 2009 relating to the review of decisions of participating institutions to refuse credit facilities.

The Statutory Instrument which created the Credit Review Office specifies the loan amounts and the business size and type over which the Credit Review Office has a mandate to review. Applications must be in respect of credit facilities from €1,000 to €3,000,000 and only Small and Medium Enterprises (SMEs) may apply. SMEs are businesses with less than 250 employees, and which have an annual turnover of less than €50 million, and/or a balance sheet total of less than €43 million.

The Credit Review Office would still be interested to hear from businesses and farms outside the criteria which would have wished to avail of the service. The Credit Review Office will record this demand to inform the Minister who may chose to review the criteria to meet any substantive unmet demand.

6. I have been refused a credit below €3m, but have other borrowings with this institution, can I still apply to have the application reviewed?

Yes. The €3m criteria applies only to the credit being applied for at the time, and not the total or aggregated borrowings of the business or farm.

You will, of course, be asked to state all existing borrowings on your review application.

7. I am concerned that if I apply for my declined or reduced application to be reviewed by the Credit Review Office that it will be held against me by my bank.

The banks have cooperated in the establishment of the Credit Review Process and have issued their internal guidance and instructions on handling internal appeals ensuring borrowers are aware of the Credit Review Office.

In the event that a borrower feels they are being adversely treated by local officials as result of appealing a credit decision, either internally to their bank or to the Credit Review Office, a number of remedies are available:

  1. they may complain to the bank using the internal complaints process.
  2. they may contact the Credit Review Office who will ensure that the grievance will be dealt with at senior levels within the bank.
  3. they may contact the Financial Regulator to pursue the grievance with the bank.
8. I live in Northern Ireland and borrow from one of the NAMA banks operating there. Can I ask the Credit Review Office to provide an opinion on a credit decision.

No. The Credit Review Office has been established under section 210 (1) of the National Asset Management Agency Act 2009 relating to the review of decisions of participating institutions to refuse credit facilities.

This applies only within the Republic of Ireland and means that the Credit Review Office only has a mandate to offer the review service to customers of the banks in the NAMA scheme in this jurisdiction.

9. Will my Information be treated in confidence?

Yes. Applications for review will be examined by people with a background in financial services, who appreciate the requirements for confidentiality.

One of the reasons for using registered post is to avoid the risk of data being compromised in open email transmission.

The Credit Review Office premises is a secure office within a secure building.

The quarterly report delivered to the Minister will by anonymised and will summarise outcomes, not individual cases.

10. What are the turnaround times for the Credit reviews

The Credit Review Office will endeavour to turnaround the opinion in as short a time as possible. However this depends on both borrowers and banks assembling their data and opinions to provide a full picture on which the review can be made.

Anticipated maximum timescales are as follows:

  1. Turnaround times for the initial credit and appeal decisions in the banks, is an internal policy matter for the banks, but the Code of Practice for Business Lending requires the bank to tell the borrower how long it is likely to take before a decision is taken on an application.
  2. Borrower requesting an opinion from the Credit Review Office – Borrowers Application form must be submitted to the Credit Review Office within 28 days of the bank’s internal appeal decision to decline or reduce facilities.
  3. Bank’s turnaround of request from Credit Review Office for completion of the Bank form must be within 15 working days. Any period longer than this will be considered a constructive refusal by the bank.
  4. The Credit Review Office will assemble the application and have the case reviewed within 10 working days.
  5. The Bank will comply with, or explain the decision not to lend, on any opinion sent to them within 5 working days.
11. I would prefer to request the Credit Review Office to give an opinion on the bank’s decision on my facilities without going through the bank’s own internal appeal process?
The bank must be requested to re-examine the lending decision through their internal appeals process. Many adverse credit decisions are already being reversed in the banks’ internal appeal processes
12. I asked my bank manager about a loan but he told me not to bother. Can the Credit Review Office help?

Yes. First you must submit a formal written request for lending to your local bank manager for formal review.

 

A useful guide to help you prepare your submission is Guidance to SME’s Seeking Credit which outlines various funding options open to businesses, provides an insight into what banks are looking for when examining credit applications, imparts information on credit pricing, and reveals practical tips on how to package credit applications.

In the event that the formal application is declined, and you still feel that your proposition is creditworthy, ask for the lending decision to be appealed within the bank.

In the event that the internal appeal is declined, you may then contact the Credit Review Office to give you an independent opinion on the credit application.

13. What is the application fee and how much does this cost?

The Credit Review Office will recover a proportion of its costs from the Borrower for the service provided. The full costs of the Credit Review Office will not be covered by these fees and the balance will be recovered from the banks.

The minimum fee for the service is €100 and the maximum fee is €250.

For credit reviews up to €100,000 the fee will be €100.

For credit reviews between €100,000 and €250,000, the fee will be €1 per thousand. For instance if a credit review is requested for facilities of €156,000, a fee of €156 will be requited; and for a facility of €194,000, a fee of €194 will be required.

14. Why is a quarterly report being made to the Minister of Finance on the outcomes of the reviews?
The Minister of Finance is concerned to see that the credit supply for small businesses and farms is working effectively. The Minister will use this report and any suggestions made by the Credit Review Office to ensure that creditworthy small businesses and farms are obtaining credit.




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