We need a proper consumer body to fight for our rights, NOT for the banks
DESPITE the alarm bells ringing for the last number of years regarding the tracker mortgage issue, it was only when badly affected individuals came before an Oireachtas committee recently that we began to learn the true extent of the malpractice of the banks in this regard.
Nothing was more dramatic in this controversy than to hear the testimonies of people such as the Ryan, Byrne, Grogan and Melbourne families who fought against the banks. They were ordinary people giving intimate details of their own personal lives and finances, and sharing their anxieties out in the open.
These individuals, who previously would not have been used to being in the limelight, have certainly done a service for the tens of thousands of others adversely affected.
Credit must go to financial consultant Padraic Kissane, who persuaded these private individuals to come forward.
Equally, the finance committee’s chairman and members must be congratulated for their work in this regard.
By giving those witnesses a platform to highlight their individual battles against the banking system, the committee has clearly shown the merits of having a public forum available such as this.
Efforts by some elements of the political system have endeavoured to turn the Oireachtas committee system into a ‘star chamber’ whereby the committee members could become ‘judge, jury and executioner’ in regard to issues of the day.
The most recent attempt in this regard was, in my view, quite rightly rejected by the voters in a referendum in 2011. The proposal to give full investigative powers to Oireachtas committees failed.
THE people, in their wisdom, decided that it was best left to the independent courts, rather than politicians, to attribute blame to individuals.
Many people were disappointed that this extension of powers was not granted to our elected representatives.
However, in my view, they fail to appreciate the full extent of the powers available to the committees of our parliament to fight inequity and injustice in our society.
By having hearings in public, and being able to call witnesses, these committees can provide a vital service in highlighting matters of public concern.
Of course, some will say that they are restricted in what they can do, and that their proceedings can be frustrated, because of legal restraints.
However, the recent performance of the finance committee has shown the true merit of the Oireachtas committee system by giving ordinary members of the public a voice.
The thousands of affected bank customers would have remained anonymous but for the dramatic testimony given. The system, banking and political, finally sat up and listened.
It remains to be seen if this controversy will be satisfactorily dealt with for all affected, within the timescales suggested.
Given the heightened focus on this issue, I have no doubt the vast majority of cases will be concluded properly.
However, there inevitably will be a number of hardcore cases which may very well end up being resolved in the courts.
Over the last number of days, we have heard a lot of suggestions about how the Central Bank can really only properly deal with cases post 2013 after the passing of most recent relevant legislation in that year. However, fairly stringent laws were introduced in the immediate aftermath of the banking crisis.
For instance, the Central Bank could initiate an investigation as to whether or not senior executives of recalcitrant banks have acted honestly, ethically and with integrity in their dealings on this issue.
We have heard reports that some banks are dealing properly with this issue while a number of others have not yet taken it seriously. Surely, the Central Bank could threaten using this type of procedure against the latter.
Viewers of the evidence given by Professor Philip Lane, the Governor of the Central Bank, and some of his executives, must have been struck by their thinly disguised frustration with some unnamed banks.
While the priority over the next few weeks and months must be to properly deal with the thousands of affected mortgage holders, we should not forget that despite all the ‘beefing up’ of the Central Bank’s powers after the banking crash there seems to be still a lingering deference by the independent regulator to the banks to the detriment of the interests of the consumer.
although the Central Bank and the Financial Services Ombudsman have been given extra powers in recent years, they have been shown to be ineffectual against the might of the banking industry.
Consequently, it is my opinion that it is high time the issue of consumer protection was dealt with by a new agency, independent of the banking system (including the Central Bank) whose job it would be to properly put consumers’ interests first.
This might be something which, at least privately, the Central Bank officials might welcome in that they are on the one hand expected to ensure that the country has a viable, profitable and efficient banking service and on the other hand they are required to look after customers’ interests.
To date, unfortunately, they do not appear to have been able to carry out both functions satisfactorily.