Ombudsman expects considerable number of tracker mortgage decisions
The Financial Services and Pensions Ombudsman, Ger Deering, has told an Oireachtas finance committee that he expects to make “a considerable number” of decisions on tracker mortgage complaints over the course of winter.
The Ombudsman told the Oireachtas Joint Committee on Finance, Public Expenditure and Reform and Taoiseach that he had been dealing with 1,174 tracker mortgage complaints at the end of November having received 374 new cases over the first 10 months of 2019. These cases included AIB customers who had been told that they were wrongly denied tracker mortgages, but the committee member and Fianna Fáil spokesperson for finance, Michael McGrath TD, noted that the “prevailing rate” for such mortgages would have been as high as 7.9 per cent.
The Central Bank published their final report into the entire ordeal in July 2019, saying 40,100 borrowers had either been wrongly refused mortgages or given the incorrect rate for the cheap mortgages linked to European Central Bank mortgage rates.
The Ombudsman told the committee that he plans to publish a synopsis on the initial tracker mortgage decisions taken by his office in January and then to publish progress reports either quarterly or biannually. Central Bank officials told the committee that banks will have to review how they handled customers if the ombudsman finds against them, with the banking industry said to have ring fenced over €1.1 billion in order to pay future fines, refunds and compensation related to the matter and banks are said to fear that more yet may be needed.
The Central Bank’s Director General for Financial Conduct told the Committee that the failings within the banking sector had been a systemic and cultural issue whereby some had failed to halt such behaviour even after they had been warned. This claim came less than a month before KBC Group Executive Director Jonathan Thijs was forced to apologise for saying that “all of this tracker mortgage stuff” was “annoying”.
Derville Rowland said that despite being given “clear instructions” to “stop the harm” once investigations into the tracker mortgage scandal had begun, onsite inspections of some banks revealed that they had failed to do so.
Rowland further told the Committee that €693 million had been paid to 98 per cent of the 40,500 customers affected. When it was put to her that this figure represented a rise of 400 on the total number included in the Central Bank’s July report on the matter, she explained that the combination of a data lag, which had made some information inaccessible at the time of the report’s publication, and more complaints being lodged during the investigation had meant that the number had risen once again.
Speaking in October, she said that 11,000 complaints had been made to that point and the figure of those outstanding was down to 126 at the time. Rowland also told the Committee that the Central Bank had strengthened their approach to supervision of lenders and that while their supervisory work was complete, they would continue to monitor the outcome of any complaints, appeals and court cases.
Also giving evidence in October was the Central Bank’s Director of Enforcement and Anti-Money Laundering, Seána Cunningham, who told the committee that the Central Bank are examining the actions of senior individuals with a view to possibly imposing sanctions. Cunningham demurred when asked if the Central Bank were “hopeful” of sanctioning individuals, saying that they would go where the “evidence leads us”.
