Minister plays down ‘cartel’ role of banks with trackers
JUNIOR finance minister Michael D’Arcy has played down suggestions the banks acted as a ‘cartel’ in ripping off tracker mortgage customers.
He had been asked by senators yesterday if the overcharging of borrowers by banks was ‘systematic’.
Mr D’Arcy replied: ‘We know that 10% of accounts were affected.
‘If it were a systematic practice, one would expect the number of accounts affected to be much higher.
‘I do not know how we got to the point that a nice even 10% of customers were affected, but we are looking into that.’
Kieran O’Donnell, the Fine Gael spokesman on finance in the Seanad, said the Competition and Consumer Protection Commission should investigate.
He said: ‘At the European Parliament committee on economic and monetary affairs yesterday, Brian Hayes MEP asked... about the issue of cartels with regard to interest rates in Ireland.
‘There is a view in the general public that a cartel operates between the main banks. That has to be investigated.
‘The Competition and Consumer Protection Commission is the authority to do it. It has stated previously that the mortgage market in Ireland is dysfunctional.
‘It owes it to people, considering the rates they are paying, to look at the matter.’
But Mr D’Arcy said in response: ‘Regarding competition, is there a cartel?
‘That is for the European commissioner for competition. She is pretty good at slapping us with fines, so perhaps she could look into that.’
He also challenged Mr O’Donnell’s statement that the CPCC believes there is a dysfunctional mortgage market.
Mr D’Arcy said: ‘We do not have a dysfunctional market; we have an expensive market because we do not have enough competition.
‘The problem is when competition comes in, goes after market share and undercuts the existing financial institutions, there is a price war. Price wars never work out well.’
Mr O’Donnell also urged the Government to allow classaction cases, on which Mr D’Arcy said there has not yet been a decision.
Sinn Féin senator Rose Conway Walsh said she will visit Iceland next week ‘to discuss the circumstances whereby dozens of bankers were sent to prison for wrongdoing within the banking system’.
She asked if Mr D’Arcy or the Government had ‘made any moves to ensure there will be individual responsibility for what was done’.
Mr D’Arcy said: ‘The population of Iceland is 300,000, and the population of Wicklow and Wexford is equivalent. The population of Ireland is 4.7million.
‘Our population is multiple times the size of Iceland’s, so comparing Iceland and Ireland in this regard is not really comparing like with like.’ He said ‘the Government does not regulate the banks, that being the role of the Central Bank on behalf of the State’.
On the issue of compensation, and the differing levels being offered to affected customers, Mr D’Arcy said some are worse affected than others.
He said: ‘I have been talking to people about tracker mortgage issues since before I became a member of Government.
‘We all have dealt with people facing these types of difficulties.
‘There is a huge difference between somebody, on the one hand, who was overcharged but was capable of making the overcharged payment without it affecting him or her in a significant material way and, on the other hand, the people who ended up losing their homes because of being overcharged.
‘My view is that the people who were seriously injured by the actions of the banks should be compensated by a country mile more than those who were not severely impacted.’
Comment – Page 12 jennifer.bray@dailymail.ie
‘Price wars never work out well’