IFA President John Bryan has challenged the Government and the Financial Regulator to regulate the interest rates and charges being imposed by the banks. He said there was increasing anger among farmers as the banks increase the costs of borrowing for existing farm and other small business customers and refuse to pass back ECB rate reductions.
“The Government and the Financial Regulator must intervene and bring some transparency to the way in which banks calculate the cost of funds. I am seeking an urgent meeting with the Regulator to discuss this.”
Mr Bryan said, “Over the past year, interest rates and other borrowing costs have increased for farm business customers as the financial institutions have implemented unilateral changes to existing accounts. This has included increased use of fees and charges, and adjustments to existing agreements (e.g. movement from Euribor to the Bank Cost of Funds as a reference rate).”
He continued, “The additional costs are putting pressure on farm incomes and the viability of farm enterprise, delaying investment and undermining the competitiveness of the agriculture sector.”
John Bryan said, “In different times, customers would be advised to shop around but the reality is, with the lack of competition in the banking sector in Ireland, and the high costs of providing security to new lenders, there are almost no options for farmer customers to move between banks in response to price rises.”
IFA Farm Business Chairman James Kane met senior officials from the Bank of Ireland this week on the issue.