Protect consumers – for real
CONSUMER protection has never been a strong suit in the Central Bank.
The fact that 184,000 residential mortgage holders are in trouble meeting their payments is proof that the regulator never succeeded in educating the public about the risks of taking on big debts.
Bernard Sheridan has held the role of director of consumer protection in the Central Bank for a number years now. Few people will be even be aware of him and his role.
Now there are calls by mortgage holder advocacy groups for a major review of the Central Bank's consumer protection role.
Groups like the Irish Mortgage Holders Organisation are upset at major changes to the code of conduct on mortgage arrears which they characterise as handing too much power to the banks.
Mr Sheridan had responsibility for the review of the mortgage code, and so he is coming in for some strong criticism. But he is in an impossible position.
His boss Governor Patrick Honohan, along with the Department of Finance and the troika, are convinced that large numbers of mortgage holders are not insolvent and could, with a different approach, begin making payments again.
In the past, consumer protection was the remit of a semi-detached body – the Financial Regulator. This was part of the Central Bank, but supposed to be independent of it. This did not work, as the bust proved.
Maybe it is time for Mr Sheridan and his consumer protection function to be separated entirely from the Central Bank. Because banking supervision and consumer protection do not make for good bedfellows.