Finance Minister gives 'disgraceful' banks deadline to recompense tracker customers

By Daniel McConnell, Political Editor

Approximately 12,000 people affected by the tracker mortgage scandal will be paid back by Christmas, Finance Minister Paschal Donohoe has said.

Mr Donohoe has given the banks until the end of June 2018 to fix the tracker mortgage scandal before he is willing to take action to sanction them, he has announced.

He said any potential Garda involvement will be determined by the Central Bank which is to issue a fresh report to him on the progress of redress in December.

Mr Donohoe said the Central Bank Governor Philip Lane told him that approximately 20,000 customers are likely to be affected in total.

Philip Lane.

Speaking at a press conference in his department, Mr Donohoe described the treatment of customers affected by the banks as “a scandal” labelling the banks' behavior as “disgraceful”.

He lambasted what he called the “legalistic” approach taken by the banks as “simply unacceptable” while saying there had been a varying response from the banks in dealing with the scandal.

“I am disappointed by the behaviour of all of the banks. All of the banks have let themselves down,” he said.

“Naughty is not the word I would use to describe the hurt inflicted on people,” he said.

When pressed as to which banks performed worst, he declined to do so for fear of contaminating the process.

When pressed about which banks he was talking to, he said he was particularly talking about the banks in which the State has a shareholding in - AIB, BOI and Permanent TSB.

In defending the delay, Mr Donohoe said more time is needed to resolve the matter.

He then will look for a second report in March to see if sufficient progress is being made or he will introduce a range of sanctions.

    They include:

  • Introducing new legal requirements for stricter reporting from the banks;
  • Amending tax laws in a targeted way;
  • Targeted actions as a shareholder in three banks

He said he hoped he would not have to use these powers but insisted he would should the banks fail to comply.

He said significant cultural issues and challenges remain in the banks and he said customer interests have not been sufficiently protected or prioritised.

“Now, the time has come for all of the banks to seek to regain the trust of the Irish people through actions not words,” he said.

He said he shared the concern of Independent Alliance ministers who earlier called for a criminal investigation to be launched, but said he felt the Central Bank should do its work before any Garda involvement is determined.

Mr Donohoe said that Philip Lane told him that he did not feel the bank required additional powers at this point, but did not rule out such powers in the future.

“I believe the Central Bank has sufficient powers to deal with this but I will consider the matter in due course,” he said.

Pic: Collins

He said he considered moving the Consumer Affairs function out of the Central Bank but that in the end he felt it best case to leave it where it is.

Mr Donohoe said he would not be drawn on how much this scandal is likely to cost in total, saying that was a matter for the banks.

There are about 7,000 people who fall outside the scope of the probe, and he said those people, if aggreived, should contact the Central Bank.

He said: "I am perscribed as to what I can say, but the Central Bank can sanction individuals if it deemed necessary."


Most Read in Ireland