The Central Bank has responded to suggestions that the Government may remove its consumer protection functions over the way the tracker mortgage scandal has been handled.
Junior Finance Minister Michael D’Arcy told RTÉ’s ‘This Week’ programme “removing the consumer protection section from the Central Bank and establishing it independently” was one of the options being considered by the Government.
The role of the Central Bank has come under the spotlight as the Minister for Finance is due to meet the heads of the country’s banks this week to ask them how they intend to compensate customers affected by the scandal, and to outline the time-frame for redress.
Earlier this week, the Chairman of the Oireachtas Finance Committee John McGuinness said figures from some financial experts suggest that as many as 30,000 people could have been wrongly removed from their tracker mortgages and moved onto a higher rate. The current figure is 13,000 people.
A spokesperson for the Central Bank told RTÉ News that it works at all times to fulfill the twin mandate given to it by the Oireachtas of safeguarding stability and protecting consumers, and it applies itself to both “with equal force”.
“Through our work to protect consumers, people can be reassured that the Central Bank is working in their best interests by requiring that lenders identify all customers affected by tracker mortgage issues, at any time in the past, and to provide appropriate redress and compensation without delay,” said the spokesman.
He said: “The Central Bank has forced lenders to deliver €163m in redress and compensation to date for affected customers and much more will follow, combined with further enforcement actions to punish banks for wrongdoing.”
And he stated that the examination of the tracker issue “is evidence of our consumer protection mandate in action”.
The Chairman and Chief Executives of Bank of Ireland, Permanent TSB and KBC will meet the Finance Minister Paschal Donohoe tomorrow.
Further meetings will take place with the other banks later in the week.
The Chairmen and CEOs of the banks will be the first to be asked to explain how they are going to compensate customers who were deprived of their trackers, and to outline the time-frame for dealing with the issue.
The Government has threatened to impose sanctions on the banks including fines, extra taxes, or more regulation if they do not make substantial progress on the issue before Christmas.
— The Week in Politics (@rtetwip) October 22, 2017
Meanwhile, Fine Gael TD Sean Kyne said that banks should be threatened with fines and legislation should be fast-tracked to impose them.
The Minister for State for Rural Affairs and Natural Resources said the threat needs to be made by Minister Donohoe when he meets the banks this week.
Speaking on RTÉ’s The Week in Politics, Mr Kyne said emergency legislation to facilitate fines should be prepared immediately and rushed through the Dáil before Christmas if needed.
He said: “Whatever legislation is needed to fine the banks should be prepared now … should be ready to go.
“And I think that threat needs to be made by Minister Donohoe to the banks, and have that rushed through the Dáil, as it were, before Christmas if needed.”
Mr Kyne accepted that Mr Donohoe’s meeting with the heads of the banks was “pre-arranged” rather than called earlier this week.
Social Democrats co-leader Catherine Murphy said fines were not enough and that bank officials need to be held personally liable.
“There will have to be a change in the law to make individuals responsible in relation to the banks,” she said.
Deputy Murphy added: “This is showing-up a [banking] culture that is completely unacceptable. But it has been allowed to become completely acceptable … because they are allowed to [do] what they like.”
Fianna Fáil TD Thomas Byrne said he was concerned that the Government was not going to be tough enough on the leaders of the banks, adding that he hoped “this meeting isn’t some type of publicity stunt”.