CENTRAL BANK RELUCTANT TO MAKE LENDERS GIVE REDRESS
THE CENTRAL Bank has expressed reluctance to use its statutory powers to force banks to give redress to customers affected by the tracker mortgage scandal.
The Irish Daily Mail revealed this week how the Central Bank does not have any powers to insist on redress and compensation for customers before 2013. It has resulted in what the Central Bank has described as ‘unacceptably low’ levels of compensation being offered to those affected.
But it was further revealed yesterday that the Central Bank also won’t be using the powers it was given in 2013 for cases which have occurred after that date.
Derville Rowland, the director general of financial conduct of the Central Bank, told the Oireachtas Finance Committee yesterday: ‘We are demanding that the two banks that we are not happy with, and there will be more that we will find
‘The powers are in reserve’
we are not happy with, to come back and answer us, but actually we think the disagreement has probably reached the stage with some of them where there is no point in continuing an inconclusive conversation anymore.
‘If people are left out of scope, and we think they should be included in the redress, we don’t have the power to deliver them into the compensation and redress scheme on a voluntary basis because the decision is with the lender, not with us.’
She said they would instead write to the affected customers and advise them to go to the Financial Services Ombudsman.
Sinn Féin’s Pearse Doherty said he was ‘shocked’ by the attitude of the Central Bank. He said: ‘You have given the impression that what you will do is look for their names and go to the Financial Services Ombudsman or the courts.
‘But you have been given the powers in 2013 where the bank is overcharging a customer to go in, ensure that the money is recompensed, and that adequate compensation takes place.’
Ms Rowland replied: ‘Can I just say that there is no power to order compensation in the 2013 Act. We can not make the lender compensate. There is a power of redress in the 2013 Act. And the power of redress is there but that would be subject to a full legal procedure where it is disputed, so obviously what we should do is consider our full suite of powers.’
Mr Doherty replied: ‘But is the Central Bank willing to use the powers that the Oireachtas has given them in the 2013 Act, to ensure the money wrongly taken will be given back?’
Ms Rowland said: ‘We have moved to use them at every occasion, sometimes for the first time. We are willing to move. Right now we are in a position where we have not yet fully crystallised the dispute with the lenders. We are moving into that space. We will consider the full suite of our powers with respect to what delivers the answer at the earliest point.’
The governor of the Central Bank, Philip Lane, said: ‘Our strategy now is listen, rather than get into a legal dispute, which will take a long time to resolve. It is much better to persuade the banks to make a good and decent voluntary offers. The powers are in reserve.’
Mr Doherty replied: ‘I am absolutely shocked that the Central Bank has acknowledged that certain people are being overcharged. What I am saying to you is you have the powers for redress. What I have not heard is that you are willing to use the powers.’