Comments of the Taoiseach in the Dáil re tracker mortgages

-   An Taoiseach, Leo Varadkar TD

  • The Govt believes the behaviour of the banks in relation to removing people from tracker mortgages was scandalous
  • We also believe they have been dragging their feet in solving this problem, with a real human cost
  • Some people have lost their homes, other have lost investment properties and aside from the financial cost there is of course the impact on people’s mental health and wellbeing
  • It’s our view that people who have been affected should have had their tracker mortgages restored and should have been fully compensated by now
  • As a Government we have lost patience
  • Consequently, the Minister for Finance has arranged to meet with CEOs of the main banks (Bank of Ireland, AIB and Ulster Bank, PTSB and KBC) on Monday and Wednesday of next week and he will admonish them for their conduct on behalf of the Government
  • He will seek a detailed explanation from the banks as to why the process has been so slow and their plans for resolving it quickly
  • While the Central Bank is fully independent as a regulator, the Minister for Finance is also contacting the Central Bank to ensure it has sufficient regulatory powers and resources to ensure the banks resolve this problem
  • The Government will take further actions if we don’t see more progress much more quickly, whether that is through enhanced powers for the Central Bank or increased taxation imposed on the banks by Government
  • It is very much in the interest of the banks to fix this situation and fix it quickly
  • The Central Bank yesterday (Tuesday) published the latest in a series of status updates on its industry-wide examination of tracker mortgage-related issues which commenced in late 2015.
  • Approx 13,000 impacted accounts have been identified by lenders as of the end of September – increase of 3,100 since March
  • The Central Bank is currently pursuing enforcement investigations in relation to tracker mortgage-related issues arising in permanent tsb plc and Ulster Bank Ireland DAC. Two further enforcement investigations into other lenders are also in train, and it is anticipated that more enforcement investigations will follow.
  • The Central Bank is not making the names of the two lenders known while the process is ongoing. As a result of the Central Bank’s challenges, the two lenders are reconsidering certain outcomes from their reviews and are due to revert to the Central Bank by end October 2017 if the Central Bank is not satisfied by the response of the two banks by the end of October I think at that point the CB will name those two lenders
  • As of the end of September, lenders have rectified the interest rates applied to approx 98% of customers affected – they are back on the interest rate they were supposed to be on
  • However redress has been much slower and initial proposals fall short of the Central Bank’s expectations
  • So far only 3,300 customers – homeowners – have received redress and compensation
  • The CB now expects that all lenders must have commenced redress and compensation by the end of this calendar year
  • (Central Bank Powers) It’s important to point out that the law has been changed in this regard – the law was changed under the Central Bank Supervision and Enforcement Act of 2013, brought in by the previous Fine Gael Labour Government
  • Unfortunately prior to that legislation, most of this happened prior to this legislation and legislation is not retrospective in Ireland, so to a certain extent the people here are very much victims of the light touch regulation that existed prior to 2013

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