Central Bank boss to tracker victims: ‘You’re on your own’
Lane tells distraught homeowners to go to court or ombudsman
THE Central Bank has been accused of deserting victims of the tracker mortgage scandal by failing to use its powers to force banks to return trackers to those who lost them.
Governor Philip Lane told an Oireachtas committee it was asking banks to write to people they refuse to give trackers back to, and told victims they can go to the courts or the ombudsman.
Sinn Féin’s Pearse Doherty accused the Central Bank of a dereliction of its duty and he asked why the regulator will not use the 2013 powers it was given to ensure these people get redress as they are being overcharged now.
The Central Bank was “the dog that doesn’t bark”, Mr Doherty said. Prof Lane said the focus is on getting the banks to restore and refund people voluntarily.
The head of financial conduct at the Central Bank, Derville Rowland, revealed she has been informing gardaí about its examination of taking customers off trackers. The Central Bank warned there will be “substantial” numbers in addition to the 20,000 tracker-denial cases already disclosed. Fianna Fáil’s Michael McGrath said the ultimate cost of redress and compensation could top €500m.
THE Central Bank has been accused of a dereliction of its duty in failing to use its powers to force banks to give back trackers to those who lost them.
Governor Philip Lane told an Oireachtas committee it was asking banks to write to people they refuse to give trackers back to, telling them they can go to the courts or the ombudsman.
The governor revealed there are large numbers of mortgage holders that the Central Bank feels should have their tracker mortgage returned.
The banks are disputing these cases.
But Sinn Féin’s Pearse Doherty accused the Central Bank of a dereliction of its duty by telling people refused tracker refunds to go to the ombudsman, or the courts. He asked why the regulator will not use the 2013 powers it was given to ensure these people get redress as they are being overcharged now. The Central Bank was “the dog that doesn’t bark”, Mr Doherty said.
Prof Lane said that would be a lengthy legal process, and the focus now is on getting the banks to restore and refund people voluntarily.
The head of financial conduct at the Central Bank, Derville Rowland, revealed she has been informing gardaí about its examination of taking customers off trackers.
The Central Bank has had two meetings with gardaí on the tracker scandal, but no formal report has been made. It was more of an information exchange.
Ms Rowland advised anyone who believes they have been affected by the tracker scandal, but who has not been contacted, to complain to their bank.
The Central Bank warned there will be “substantial” numbers in addition to the 20,000 tracker-denial cases already disclosed.
Financial adviser Padraic Kissane has estimated up to 30,000 will eventually emerge as the final number.
However, TDs were aghast to learn only two on-site inspections of banks denying customers the return of trackers have been carried out by the Central Bank.
The committee heard just 26 of the close to 2,000 staff in the Central Bank are working full-time on the tracker redress process involving 15 lenders.
Prof Lane described the examination as “the largest,
most complex and significant conduct review that we have undertaken to date in the context of our consumer protection mandate”.
But he repeatedly refused to say if he needs extra powers, before eventually saying the regulator’s powers were sufficient.
Politicians were told the Central Bank only got powers to order lenders to compensate people for the loss of trackers from 2013 on, and could not impose sanctions for actions before then.
Banks were being urged to do the right thing by their customers, the Central Bank boss said.
Committee chairman John McGuinness described the tracker scandal as grand theft.
“If I go into a shop and steal a pair of socks I’ll probably be in court next Tuesday,” he said.
“Isn’t it the case that banks took money fraudulently? On request they did not return the money. You could describe that as stealing money from people.
“It is a question of grand theft from thousands of people, and the banks did not return it.”
Fianna Fáil finance spokesman Michael McGrath said the ultimate cost of redress and compensation could be more than €500m, making it “one of the greatest consumer rip-offs in our State”.
Meanwhile, Taoiseach Leo Varadkar rejected suggestions that the Government is powerless to force the banks to act when asked about Paschal Donohoe’s intention to haul in the banks and admonish them over the scandal.
Mr Varadkar argued that former Taoiseach Enda Kenny and former finance minister Michael Noonan brought the banks in over mortgage arrears and that “arrears have been falling very substantially in Ireland in recent years”.
He said he is open to new laws and additional taxation to address the tracker mortgage issue but that “all those things actually will take too long”.
He added: “The banks have it in their power to sort this out within a matter of months.”