Churches make fair banking call
Northern Ireland’s banks will meet church leaders after their claim that financial institutions were profiteering at the expense of small businesses. Poor lending, increased charges and unfair treatment of customers were among the accusations made by the leaders of the four main churches.
Businesses had approached the Church of Ireland’s Archbishop of Armagh, Rev Alan Harper, who led the initiative. His call was supported by Cardinal Seán Brady, Presbyterian Moderator Dr Norman Hamilton and Methodist President Rev Paul Kingston.
“I and my colleagues have been collecting examples of the way in which the banks have failed, in our opinion, to live up to their obligations or to operate according to the norms of best practice,” said Archbishop Harper.
The leaders also planned to meet Executive ministers and Treasury officials.
“We appreciate that the banks have a duty to restore strength to themselves and their sector overall,” he continued. “However, some of the experiences of businesses which have approached me are quite shocking, leading to instances of decent businesses, and decent business people being placed under immense pressure with the ultimate danger of closure and job losses which affect the whole community.”
Rapid restoration of bank balance sheets was a “tangible risk” to the economy, which threatened jobs and families’ incomes.
Cardinal Brady said that many businesspeople had been “placed under needless financial pressure” when they were running “solid businesses” which have provided much needed employment across Northern Ireland.
“Many of our banks are businesses that have received support from the tax-payer to get them through these turbulent times,” he recalled. “I think most tax- payers want to see the banks taking a similar approach to the businesses and indeed the homeowners who depend on them.”
It is relatively rare for the churches to comment on economic policy; past statements have tended to focus on social policy or the peace process. The call is supported by Northern Ireland Manufacturing, the Quarry Products Association and the trade union Unite.
In response, the main banks said that lending depended on ability to repay and healthy banks were important for the recovery. They also highlighted their support schemes for companies during the recession.
“Bank lending is not risk finance,” a British Bankers’ Association spokesman said. “It is debt finance. It is not the banks’ money to risk; it is their customers’.”
Key problems
• Significant inflation in facility renewal charges, transaction charges or interest rates from previous levels
• Immediate withdrawal of existing overdraft and project loan facilities
• Prolonged deliberation for facility renewal or project approval
• Insistence upon costly third party reports to facilitate appraisal
• Inaccessibility to decision- makers with deferral to line managers without adequate authority
• Micro-management of the client business affairs
• Business sectoral discrimination e.g. construction
• Pressure to renew loans from previous lower rate deals into higher rate ones
• A culture of aggression and threat, where the only priorities are the banks’ priorities
Source: Church of Ireland
