Wednesday 17 January 2018

BoI’s Boucher heads for showdown on write-offs

Bank of Ireland chief executive Richie Boucher
Bank of Ireland chief executive Richie Boucher

Sarah Stack and Donal O’Donovan

BANK of Ireland boss Richie Boucher is heading for a showdown over his instance the bank will veto write-offs for struggling mortgage-holders going through insolvency.

Central Bank Governor Patrick Honohan told the Dail Finance Committee that Bank of Ireland’s policy was “wholly unsatisfactory”.

Mr Honohan told Labour TD Kevin Humphreys that a change of policy by Bank of Ireland on the issue was “inevitable”.

The head of the Insolvency Service of Ireland, Loran O’Connor, also vowed to meet the Bank of Ireland chief executive over his aim to veto the write-downs of secured debt.

Mr O'Connor came under fire for not picking up the phone to Mr Boucher when he said his bank would not accept any proposal from Personal Insolvency Practitioners (PIP) featuring mortgage writedowns for its customers.

Mr O'Connor admitted “red flags” had been raised by Mr Boucher about the policy of the bank not to write down mortgage debt.

“The language used and position articulated at the beginning of the month does highlight areas we need to pay close attention to,” he said.

“I would be happy to commit to the committee – I will request the meeting and talk through issues and scenarios to tease out what their particular issues are,” he added.

While Mr O'Connor initially avoided naming Bank of Ireland, Fianna Fail finance spokesman Michael McGrath said: “We can name names.

“We all know who they are. Bank of Ireland made it very clear that they would veto any personal insolvency arrangements which involved writing off some mortgage debt,” he said.

A spokeswoman for Bank of Ireland said it is fully compliant with Code of Conduct on Mortgage Arrears and working constructively with the Insolvency Service of Ireland.

Central Bank figures show 136,564 mortgage holders – 17.9pc of accounts – were in some form of arrears of their family home by the end of 2013.

Almost 40,000 buy-to-lets – 27pc of accounts – were also behind on payments.

Mr Honohan also told the committee he was concerned by the sales of mortgages by banks to unregulated buyers that are not bound by the Code of Conduct for lenders.

“I am not pleased with this development,” he told the Dail Finance Committee.

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