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Sunday 18 November 2018

Donohoe may beef up tracker laws to hit the banks

Finance Minister Paschal Donohoe. Photo: Steve Humphreys
Finance Minister Paschal Donohoe. Photo: Steve Humphreys
Charlie Weston

Charlie Weston

Finance Minister Paschal Donohoe is prepared to strengthen legislation to pursue bankers who illegally took trackers off customers.

Mr Donohoe told the Oireachtas Finance Committee that a "collective failing" by the banks was behind the tracker mortgage rip-off.

They had failed to act in the best interests of their customers, as they are required to do. But he cannot prejudge a Central Bank investigation into whether it was an "accident" that all banks took trackers off people at the same time.

Some 33,700 customers have been identified as being affected by the tracker mortgage issue.

The minister was responding to Sinn Féin's Pearse Doherty, who said the €1bn tracker scandal was theft and bankers should pay the consequences.

"Bankers are getting away with it, getting away with the biggest theft in the history of this State," he said.

The Sinn Féin TD said there would be a new scandal unless there was a fundamental change in the law. There was also a need for the Government to support a private members' bill to allow class actions, which could be used by groups of people to take on the banks.

Mr Donohoe said he had asked the Central Bank previously if it had sufficient powers and he was told it had.

He noted the Central Bank had recently said it needed greater powers, when the regulator was responding to a Law Reform Commission report. The Central Bank said it now wanted heads of financial firms to be liable for company failures.

The minister was prepared to legislate if stronger powers were called for by the Central Bank. Justice Minister Charlie Flanagan was examining if there is a need for a change to allow class actions.

He said there were currently no public-interest directors on the boards of the banks in which the State had a stake. There was a tension between its duty to the companies and the expectations of the public and Oireachtas.

Directors would be appointed to the boards of AIB, Bank of Ireland and Permanent TSB, but they will not be public-interest directors, as those roles applied only when the State guaranteed banks' funds.

Irish Independent

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