Richie Boucher sticks the boot into AIB

gaius c · 09-05-2014 10:50AM #1

Linky

Bank of Ireland chief executive Richie Boucher has defended the company’s tough stance on debt forgiveness.
Mr Boucher, in an interview with The Irish Times, also questioned recent write-offs being offered by rival AIB to mortgage arrears customers via a pilot scheme operated with the Irish Mortgage Holders Association (IMHO).

“We have been consistent [on debt forgiveness]. I am sure, and I know, that’s not to everyone’s taste but then again how does debt forgiveness arrive in AIB? he asked. “Is there transparency? Is it some type of a lottery where names are pulled out of a hat every morning? I don’t know.”

‘Blunt’ approach criticised
When asked why Bank of Ireland has not established a similar partnership with the IMHO, Mr Boucher replied: “We think the collection of mortgage arrears should be a core competency in a bank that employs over 11,000 people.” Bank of Ireland was criticised last week by Lorcan O’Connor, the head of the Insolvency Service of Ireland, for its “blunt” approach with distressed borrowers.
Mr Boucher responded: “Every concession means someone [else] has to pay . . . We have responsibilities to the people who are meeting their mortgages, to depositors [and] to the people who have given us capital.”

He's right to be pissed off. His bank are at a competitive disadvantage to AIB squandering money without a care because they know the taxpayer will pick up the tab.

I also like how he's subtly hinting that we should really be getting a closer look at WHO is getting these writeoffs.

Idbatterim · 09-05-2014 02:30PM

He's right to be pissed off. His bank are at a competitive disadvantage to AIB squandering money without a care because they know the taxpayer will pick up the tab.

I also like how he's subtly hinting that we should really be getting a closer look at WHO is getting these writeoffs.

I absolutely agree with him, the below appeared in the indo recently. It answers a question I have posed before, IF these people getting huge write offs come into a windfall etc, what happens, likewise if there employment situation or ability to pay changes...

http://www.independent.ie/business/personal-finance/debt-deal-recipients-will-have-to-hand-over-gifts-to-banks-30237519.html

CHARLIE WESTON, PERSONAL FINANCE EDITOR – PUBLISHED 02 MAY 2014 02:30 AM

Cash-strapped people who enter into a personal insolvency deal and then get an inheritance will have to give most of it to the banks.

Under new protocols drafted by the Insolvency Service, a debtor who gets "an inheritance, gift, gaming win or any other asset in monetary nature" which amounts to more than €500 in value, will have to give it up to the banks and others who are owed money.

They will get to keep just €500 of the inheritance.

This would mean that someone who has entered into a five-year debt settlement arrangement who inherits their parents' house during this time, will end up having to hand it over to the banks and get to keep just €500.

However, there are some indications that this strict rule could be relaxed before the protocols are finally agreed. The final protocol is due to be in place in four weeks.

And any rise in the household's income above 5pc will trigger a meeting of all the creditors and a new deal will have to be hammered out, the draft insolvency protocols, seen by the Irish Independent, propose.

The draft of the new rules being worked on by the Insolvency Service sets out a more than 40 rules about how a debt settlement arrangement (DSA) should work.

People who get a debt deal from their banks will have just two weeks to tell their personal insolvency practitioner (PIP) if their financial circumstances change, the draft document states.

The new protocol is being devised to streamline the insolvency process for people trying to work out deals with banks and other creditors, and PIPs.

The protocol is designed to make debt deals more "straightforward", efficient and acceptable to debtors and banks. The initial protocol will cover arrangements involving unsecured debts, such as bank loans and catalogue debt.

Other new rules in the draft protocol state that:

* A debtor must not transfer, lease or dispose of any property worth more than €650.

* Any breach of the rules will require the PIP to convene a new meeting of the creditors.

* And if the debt deal fails then the debtor is liable for all the debts covered by the arrangement.

A DSA is a court-approved arrangement, processed by the Insolvency Service, to allow debtors and creditors to restructure unsecured debts such as credit union loans, credit card debts and money borrowed to buy a car.

The new protocol is an attempt to to change the system to make it similar to the UK's Individual Voluntary Arrangement (IVA) – making it cheaper and less bureaucratic.

Critics of the Insolvency Service have claimed the move to introduce the protocol is an admission that the new system is not working.

Just 10 DSAs have been agreed despite the insolvency service being in place for a year.

A steering group, made up of representatives from AIB and Bank of Ireland, State advisory body MABS, one of the credit union bodies, the Irish Banking Federation and a number of PIPs, has been meeting since February to agree on the new protocols.

quadrifoglio verde · 10-05-2014 10:49PM

Idbatterim wrote: »

I absolutely agree with him, the below appeared in the indo recently. It answers a question I have posed before, IF these people getting huge write offs come into a windfall etc, what happens, likewise if there employment situation or ability to pay changes...

http://www.independent.ie/business/personal-finance/debt-deal-recipients-will-have-to-hand-over-gifts-to-banks-30237519.html

Agreed. Just because I'm out of work or have taken a pay cut, doesn't mean that Ill get a new job or a nice promotion.

Another thing that annoys me about the no to repossessions brigade is those who claim that they'll have no where else to go and if they're repossessed they'll be homeless.
For those people I've a newsflash...renting doesn't make one homeless.
Boucher highlights a good point that someone else has to pay.
People/campaigners fail to realise that if debt is written off, it has to be covered somewhere. With BOI not state guaranteed, this money won't come from the government, it'll come from the other hard pressed mortgage payers.

Idbatterim · 11-05-2014 01:39AM

the situation is absolutely insane the more I think of it. Here I am renting, if I continued to, I'd never own. Here we have who borrowed huge sums and now they get to keep the property and effectively, AIB are writing off huge sums with no recourse?! and what their credit rating will be effected for what 2-3 years under current proposals?! stopping them from doing what? buying another house? Its the only large essential purchase where most are forced to borrow, nothing else essential has to be bough on credit... So these people are effectively having several hundred thousand euro cheques written out to them, its as good as...

Sand · 11-05-2014 10:20AM

AIB were given huge sums precisely so they could take a rational view of their loan book. A rational view that involves writing off huge amounts of bad debt and lost investments in a epic property bubble - which includes repossessing the property by default.

All the money given to AIB has already been passed across by the taxpayer. It's only a question of if private investors will get their hands on it, or if it will be used for its intended purpose in the Irish economy.

I disagree entirely with bailing AIB out, but it only makes any logical sense if the bail out is used to finally address the huge debt overhang in the Irish economy, rather than being looted for bonuses, salaries and private wealth.

IF these people getting huge write offs come into a windfall etc, what happens, likewise if there employment situation or ability to pay changes...

Nothing. Once the deal is drawn up and implemented, they could win the lotto the day after and they will have no liability to pay back any more money. That is what bankruptcy and debt write off means - the debt is written off, regardless of future events.

quadrifoglio verde · 11-05-2014 10:34AM

This isn't bankruptcy though. Bankruptcy would mean any assets taken and sold.

With regards to aib being given loads of money to do this. The less money aib write off, the less tax payers money would be called on to shore up the losses meaning a return of said money.
Who are these foreign investors that will get this tax payers money if debts aren't written off?

nxbyveromdwjpg · 25-05-2014 11:06AM

quadrifoglio verde wrote: »

meaning a return of said money.

Ha ha, not likely

_Kaiser_ · 26-05-2014 12:32PM

nm wrote: »

Ha ha, not likely

Indeed, all the money that has been handed over since 2008 by the taxpayer (without any say in the matter I might add!) is gone. We'll never see that back.

What we WILL see is inceased charges to cover any supposed write-offs however.

gaius c · 26-05-2014 12:58PM

Kaiser2000 wrote: »

Indeed, all the money that has been handed over since 2008 by the taxpayer (without any say in the matter I might add!) is gone. We'll never see that back.

What we WILL see is inceased charges to cover any supposed write-offs however.

Or a bail in.

Richie Boucher sticks the boot into AIB

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