INBS approved hundreds of loans against its own rules
Tom McMenamin, who was Irish Nationwide Building Society's (INBS) head of commercial lending at the height of the property boom, said yesterday he could not "figure out" how the credit committee he unofficially chaired had approved and recommended hundreds of millions of euro in loan applications in breach of the organisation's own rules.
Appearing before the Central Bank's INBS inquiry, Mr McMenamin insisted he "worked diligently and honestly" during his time at the Society and had made "every effort not to breach rules or regulations".
In exchanges with Brian O'Moore SC, who is advising the Inquiry, Mr McMenamin said he could not understand how large loans were approved by the committee when it had only two members - including himself - less than the three-member quorum required in the Society's own regulations.
Mr O'Moore listed half-a-dozen occasions when loans worth tens of millions of euro were signed off by the committee and advanced up the line for final approval by INBS' board, without a full complement of members.
The inquiry heard that at one meeting, in August 2004, Mr McMenamin and fellow credit committee member John Roche approved and recommended loans worth in excess of €35m and £46m.
"Quite a chunky bit of business" Mr O'Moore observed.
On another occasion, the inquiry heard, the credit committee sanctioned more than €150m in funds plus additional loans worth over £53m.
That prompted Mr McMenamin to question whether the minutes, signed by him, had correctly recorded who was in attendance. "I find it very hard to accept there were only two of us," he said.
Mr O'Moore replied: "Let's have a stab at this. Who else would have turned up?"
Mr McMenamin conceded, under heavy questioning, that he had occupied the "top of the commercial lending tree" at INBS and acknowledged he had convened and chaired its credit committees up until 2007, when former managing director Michael Fingleton assumed the role.
Mr McMenamin told the inquiry he had never been presented with the exact rules of the credit committee, although Mr O'Moore challenged him about how he then knew there needed to be a minimum quorum of three members?
The former head of lending replied: "I can't honestly answer that question" and pointed out that 13 or 14 years had elapsed.
Mr O'Moore urged him to "stand back from personal responsibility" for a moment and consider whether, at that time, the Society appeared to "not be operating coherently as a body given the amount of money that is being dispensed"?
Irish Nationwide was nationalised in 2010 at a cost of €5.4bn to taxpayers.