MercoPress. South Atlantic News Agency

Irish church leaders attack “shocking” lending practices of some banks

Cardinal Sean Brady, Catholic archbishop of Armagh

Church leaders in Northern Ireland have launched a bitter attack on the ‘shocking’ lending polices of some banks, claiming they are putting ‘decent’ businesses and people at risk.

Banks are failing to live up their obligations and failing to operate according to best practice, according to the leaders of the Catholic, Methodist, Presbyterian and Protestant churches.

The group is collecting examples of alleged poor practice, including cases where loan rates have been hiked, existing credit lines have been withdrawn, and an overall ‘culture of aggression and threat, where the only priorities are the banks’ priorities’.

In a statement the leaders of the four churches are now seeking urgent meetings with banking and political leaders to discuss the allegations.

‘We appreciate that the banks have a duty to restore strength to themselves and their sector overall,’ said the most reverend Alan Harper, Archbishop of Armagh within the Church of Ireland.

‘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.’

Cardinal Sean Brady, Catholic archbishop of Armagh, said banks had a duty help out businesses following the taxpayer bailout.

‘Many of our banks are businesses that have received support from the tax-payer to get them through these turbulent times,’ Cardinal Brady said.

‘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. Banks have a duty to society, to the social economy of persons as well as for the legitimate pursuit of their own profitability.’

A spokesman for the British Bankers’ Association denied the allegations, and said banks were committed to working towards the economic recovery.

‘The core business of banking is to make a return for customers by lending depositors' money to sound borrowers, for the benefit of all customers,’ he said.

‘Bank lending is not risk finance: it is debt finance. It is not the banks' money to risk; it is their customers. Therefore banks need borrowers to assure them they have a robust plan in place to ensure the money is repaid and will work with them to achieve this.

The coalition of churches understands it has not yet taken account of the banks' perspective, and has invited the banks to meet with them to discuss the issues their parishioners raise.