Mortgage charges have revealed our benevolent banks’ true colours

THE more things change the more they stay the same, as the old saying goes. So it certainly goes for Ireland’s banks who, in recent days, have revealed a marked unwillingness to change their spots, even in the midst of a global health emergency. In the wake of the 2009 economic crash and banking crisis, it would be hard to think much less of the banking classes but the news that several pillar banks seem to be actively trying to profit from the COVID crisis marks a new low.

We may all be living in – and slowly adjusting to – the ‘new normal’ but the last week has shown that, even in the COVID era, it’s still very much a case of business as usual for our nation’s avaricious bankers.

Never the most popular of institutions, Ireland’s banks have well and truly outdone themselves on this occasion.

At the start of the COVID crisis and the national lock-down, the banks – and, to be fair, many other large companies – fell over themselves to appear helpful and to let the people know they were doing their bit for the country.

Soft focus TV ads and trite radio commercials were the order of the day as our lenders rushed to reassure the public that, they too, were embracing the new found sense of community that was washing over the nation.

As the crisis worsened, and half the country found itself furloughed, the banks would not be found wanting. Or at least that’s what they told us.

Mortgage owners were told not to worry and, with an ease normally unheard of, hundreds of thousands of them were soon able to organise payment breaks on their loans.

Their houses were safe and they would face no penalties. The Devil, of course, was in the detail.

As the lock-down eased and people began to get their lives and finances back on track, many mortgage holders soon cottoned on to an unwelcome, if sadly unsurprising, catch.

They might not be facing any ‘penalties’ for taking a payment break but they were still facing thousands of Euro in additional interest payments.

The holder of a typical €250,000 30-year mortgage is looking at paying up to €6,000 more over the courses of their loan.

When challenged the banks reverted to type and claimed they were following instructions from the Central Bank who, they claimed, had told them they must apply interest.

What, they argued, could the benevolent bankers do in the face of Central Bank bureaucrats and their reams of red tape?

That argument was demolished last week when the Governor of the Central Bank told the Dáil COVID-19 Committee that no such order had ever been given and it had always been entirely up to the banks to decide if they would apply interest.

And with potentially billions of Euros in additional profits to be made what did they decide?

In the last week many commentators have noted that the banks have broken no laws. That’s true.

What they have done isn’t illegal. It’s just wrong.