CREDIT unions won't be taking part in the pilot scheme from the Central Bank because they say it fails to give "real relief" to borrowers.
The decision to reject the Central Bank move to tackle mortgage arrears comes after months of negotiations with the regulators involving banks, credit card providers and the league of credit unions.
CEO of the Irish League of Credit Unions, Kieron Brennan, said many of the concerns it raised in regard to the proposed framework were ignored at these talks.
"Our complaint is that in this proposal the banks are taking no pain and are keeping all of their capital intact," he said.
"We would think there is a degree of immorality in a situation where you know someone is in sustainable debt, to extract payments from them, park some of his debt and then ultimately the bank repossesses the property at the end of the process.
"The banks agreed among themselves and have agreed their own arrangements. We don't want to legitimise what we see as a sham situation where people are taken in and bled dry for years."
Mr Brennan said credit unions have always "taken care" of their members to arrange a repayment scheme that is sustainable.
"It is the banks that have to be beaten up, dragged kicking and screaming into the process," he added.
"We are saying to the Central Bank to reconsider this proposal and include some kind of definite mortgage write-off for those who are very distressed."