Cantillon: Mabs’ position as clear as mud

After yesterday's statement from the Money Advice and Budgeting Service concerning their involvement or otherwise in the proposed Central Bank pilot scheme to deal with distressed debtors with multiple debts, everything is as clear as mud. Media reports yesterday and at the weekend were pretty clear in creating a picture whereby, for reasons that were obscure to the Central Bank, Mabs, having won the competion to be the independent third party service provider to the scheme, had subsequently withdrawn.

After yesterday’s statement from Mabs, it is no longer clear Mabs has withdrawn. It’s position is it won the third party service provider role and was ready to work under the agreed terms and conditions, when these were changed, after the fact, by “certain lenders”. The effect of the changes was to make the scheme no longer suitable for Mabs, but it remains ready and waiting to leap into action, if the scheme reverts to its original iteration.

Dame Street is saying nothing, but it is hard to understand how it can be the case that whatever difficulties Mabs has with whatever is going on, are not fully known to the Central Bank. The message in Monday’s reports was that the Central Bank was now going to approach the two underbidders for the service provider role, to see if they would be intested in taking on the part vacated by Mabs. It is hard to see them doing so without getting clarity beforehand that the various lenders taking part in the scheme are doing so under agreed terms.

The Irish League of Credit Unions walked out on the process some time ago but enough individual credit unions are believed to have responded positively to requests to get involved in the scheme, to have allowed the three-month pilot project operate. The message from Mabs appears to be these credit unions, or some of them at least, are not as comfortably on board as Mabs believes they need to be.

Meanwhile the poor distressed borrower is left worrying how to deal with the position he or she is in. The debt disaster is a typical sticky crisis, where everyone involved is watching everyone else to ensure they are not the ones to get suckered. It is a type of scenario that does no one any good, and whoever can get matters moving will be deserving of society’s gratitude.