Saturday 17 August 2019

Central Bank ‘being bullied by lenders’, committee told

Regulator now says 15,000 homeowners had cheap mortgages taken off them

Prof Philip Lane denied the accusations in heated debate. Photo: Tony Gavin
Prof Philip Lane denied the accusations in heated debate. Photo: Tony Gavin
Charlie Weston

Charlie Weston

Some 100 people, mostly families, lost their homes through lenders denying them low-cost tracker mortgages, the Oireachtas Finance Committee was told.

This is twice the previous number thought to have lost their homes.

The Central Bank now says some 15,000 homeowners may have been wrongly denied good-value trackers by their lenders.

The figure of 15,000 customers impacted is far higher than earlier numbers supplied by the Central Bank.

It emerged after the committee hearing was adjourned for a break to allow Professor Philip Lane to check his figures. Sustained criticism was directed at Central Bank governor Prof Lane by TDs and senators over the handling by regulators of the tracker mortgage scandal.

He was forced to deny the Central Bank was being bullied by banks it regulates.

At the start of the hearing, Central Bank executive Ed Sibley had suggested Bank of Ireland may have restored 5,000 customers to trackers six years ago, a much higher figure than Bank of Ireland had stated.

After a break, Prof Lane corrected the 5,000 figure.

Read more: Number of mortgage holders who lost good-value trackers may rise over 10,000 by time investigation completed

Read more: Interview: Big banks' behaviour was just unacceptable, says Governor of Central Bank

He clarified that Bank of Ireland was stopped by the Central Bank before it could take trackers from 3,000 customers.

He explained that Bank of Ireland did take 2,100 people off trackers, and the customers were returned to the correct rate six years ago.

Prof Lane admitted he made an error by disclosing the information about the attempted tracker move by Bank of Ireland earlier in the hearing.

Last week Bank of Ireland admitted another 602 customers have now been found who will have trackers restored and be refunded and compensated.

It said another 4,000 mortgage customers have trackers, but they were charged too much interest.

It is understood that most of the mortgage holders who were either denied a tracker or charged the wrong tracker margin, were bank staff.

Under intense questioning and heated exchanges, Prof Lane was told he was allowing banks to bully the Central Bank.

Committee chairman John McGuinness questioned why the governor was not clear on the total number of people who were denied a return to a tracker after fixing for a period.

Mr McGuinness questioned if the Central Bank was up to the job of regulating the banks.

"The lack of information you are giving us is striking. You should have these figures ready for the committee. Are you being bullied by the banks? I would conclude you are afraid of the banks."

Prof Lane said that there was "zero basis" to say he was afraid of the banks. "I totally dispute your characterisation of what the Central Bank is doing."

The Central Bank governor admitted the numbers impacted by the crisis was likely to be close to 15,000, after being repeatedly questioned on the data by politicians.

He said that "in the order of 100, high double digits" lost their homes as a result the tracker mortgage scandal.

Up to now the Central Bank had said that 8,200 cases had been verified by banks.

But this does not include 2,100 Bank of Ireland cases dating from 2010, and almost 1,400 Permanent TSB cases which were mostly concluded last year, along with other cases emerging.

Fianna Fáil's Michael McGrath suggested the total number of those denied trackers may be 15,500.

Sinn Féin's Pearse Doherty accused banks of theft from their customers.

He said the then-financial services ombudsman had written to the Central Bank in 2009 seeking an industry-wide probe. But the probe was only announced last December.

"In my view this was industry-wide theft, and you were aware of this," Mr Doherty said.

Fine Gael senator Kieran O'Donnell questioned why just seven people in the Central Bank's consumer protectorate division are over-seeing the tracker redress programme.

Irish Independent

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