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Updated 6.20pm
MINISTER FOR FINANCE Paschal Donohoe has said that the government strongly condemns the actions of the banking sector, calling the tracker mortgage scandal “disgraceful” and “simply unacceptable”.
Having met with the CEOs of the major banks this week, Donohoe said that he had received a timeline for when affected customers would be repaid and said that the government was considering new regulations to enhance accountability in the banking sector.
“The Irish people made extraordinary sacrifices to support the banks at the height of the financial crisis,” he said. “Having done so, it is right that we demand, on behalf of the people, that the banking sector now, more than ever, operates in the best interests of its customers.”
Both the government and the Central Bank have said that it is now up to the banks to provide the adequate redress for customers as quickly as possible, and restore faith in the sector.
The banks, meanwhile, have issued apologies and timelines for when customers would be repaid.
Ulster Bank
Ulster Bank CEO Gerry Mallon said the company “would like to apologise unreservedly” for the failures to customers.
Mallon said that the bank had “listened”, “is learning” and is “focused on completing this process [and] putting this right”.
The bank said that just under 3,500 customers had been identified as being affected by losing their tracker rates.
It said that 1,000 customers would receive payments by the end of 2017. This will increase to 2,500 customers in the first quarter of 2018, with the “remainder” paid by the end of June 2018.
“Where we identify a customer who has lost their home as a result of the loss of a tracker rate, we communicate with them, arrange a meeting and offer an upfront initial payment of €50,000,” Ulster Bank said.
AIB
AIB said that around 4,500 customers in all were affected – including 3,586 customers wrongly not on a tracker and 1,016 customers on a higher margin.
It said that 30 different customer groups had been affected by the errors.
Of the customers wrongly not on a tracker, it said that 12 had lost their homes as a result of this issue. These customers received redress and compensation by the end of March this year, the bank said.
It said that it had set aside €190 million to cover customers, and that the majority would receive compensation and redress by the end of this year, and by March 2018 at the latest.
It said: “AIB again sincerely apologises to customers and reiterates this should never have happened. AIB’s CEO Bernard Byrne confirmed to the Minister during their discussions of the commitment of management and board to bring the programme to a conclusion as quickly as possible in the interests of impacted customers.”
Bank of Ireland
Bank of Ireland said it had identified 4,300 cases in all where customers were either wrongly not on a tracker, or charged at the wrong rate.
It said it would start the compensation process for these customers from 10 November. It said it aims to compensate all customers by the end of the year.
BOI also said it would continue to examine if other customers had been affected, and it is understood that it is committing extra resources towards this.
Its CEO Francesa McDonagh said: “I unreservedly apologise to all impacted customers for the financial loss and anxiety this has caused them and their families.
All impacted customers must be identified as quickly as possible and treated fairly.
KBC
KBC said that around 490 customers were affected, but anticipated another 200 to 600 could be.
It expects to have paid back everyone by the end of the year.
“KBC fully acknowledges the past errors that occurred in relation to Tracker Mortgages should not have happened, were wrong and we sincerely apologise for this once again,” it said.
PTSB
Permanent TSB also issued an apology for the scandal.
“The bank accepts the failures that led to this issue should not have occurred,” it said.
It added that just under 2,000 cases had been identified, and had written to 1,608 of them to offer redress and compensation.
It has set a deadline of 31st December to issue offers to the remaining 363 customers.
It added: “The focus in Permanent TSB is on bringing this matter to a conclusion.”
Investigation
Minister Donohoe said that the Central Bank is of the view some bank behaviour on the tracker mortgage scandal had been “unacceptable, legalistic and not customer centred”.
He said: “There has been a varying response from the banks and as a result, banks that did actually respond in a more appropriate and customer centric manner will not receive any credit for doing so.”
The Central Bank will set deadlines for the banks to identify further affected customers and provide them with compensation.
Central Bank Governor Philip Lane said: “While we note the commitment of the banks to meet the requirements of the Central Bank and Government, given some lenders’ past behaviour, the Central Bank is under no illusion that this will require continued and concerted pressure to ensure all affected customers receive redress and compensation.
It is now incumbent on the heads of the banks to ensure that all affected customers are identified, and to ensure that redress and compensation are delivered swiftly to those to whom so much distress has been caused.
Donohoe will get a progress report in mid-December from the Central Bank on how the banks are faring in their investigations and compensation schemes.
If the Central Bank deems that not enough progress has been made, it could introduce stricter legislative scrutiny on banks’ reporting, amend tax law or use the government’s power as a shareholder in the banks to exercise greater power over the banks.
“Customer interests have not been sufficiently protected or prioritised. This is unacceptable,” he said.
Accordingly, I have mandated the Central Bank under section 6A of the Central Bank Act to prepare a report for me on the current cultures and behaviours and the associated risks in the retail banks today and the actions that may be taken to ensure that banks prioritise customer interests in the future.
On foot of this report, the Government will determine whether any additional legislative and regulatory changes are needed that would enhance accountability in the banks for ensuring customer interests are prioritised.
What’s new in what the Finance Minister Paschal Donohoe announced today?
Other than demanding a timeline for actions and redress, the minister said he wants two reports from the Central Bank (as mentioned above). He said he MAY then take action against banks.
The first report (which was already in the process of being carried out) is due in mid-December. This is a progress report on whether the banks have made acceptable and sufficient progress in line with the commitments announced today by the banks.
The second report is on the culture within Irish banks. Despite the minister stating that there is something a miss within the culture of the Irish banking system, Donohoe is commissioning a report, due to be published in Spring 2018.
“On foot of this report, the government will determine whether any addition legislative and regulatory changes are needed that would enhance accountability in the banks for ensuring customer interests are prioritised,” said the minister.
How much will customers get in redress?
Donohoe said it’s up to the Central Bank to determine what sort of redress is appropriate to the estimated 20,000 affected customers.
What can the government do if the banks fail to deliver on their promises today?
The minister said a number of “follow-up” actions are open to him. These include:
When referencing tax, the minister is referring to the bank levy, imposed on banks post after the taxpayer bailed out the banks during the recession. He said he will consider raising it if the banks do not sort out the mess of the tracker mortgage scandal.
The minister said he will also not review the pay or the bonuses of bankers until the banks make progress on the tracker mortgage issue.
He added that the Central Bank is also concerned that two banks had failed to fully identify customers impacted, but he would not name those banks.
He will consider what sanctions can be imposed on both individuals and individual banks should they fail to deliver on their commitments, adding he may decide to take different actions on different banks depending on how they perform.
What about the gardaí? Why aren’t they involved?
The Independent Alliance, who are in government with Fine Gael, called for a full criminal investigation to be carried out into the banks. They said the minister must now exercise its rights as shareholder in some banks and bring its power to bear on board appointments and behaviour.
“We believe that what has happened to the more than 20,000 customers of these Banks should be the subject of a criminal investigation. The allegations of fraud which have been made more than merit a top-level criminal investigation rather than just a Central Bank investigation.”
“We must not forget that many people lost their homes due to an inability to repay their mortgage after being taken off tracker rates while others have suffered severe ill-health through the cruel tactics employed by some banks.”
“The time for talking is over. The Banks were given plenty of notice that this was a problem they had to solve. Now it is obvious that a criminal investigation is needed to get to the bottom of the scandal.”
The minister would not go so far as his government colleagues today, stating that the gardaí have been engaging with the Central Bank on the issue.
Whether the gardaí get involved is a matter that will “be determined by the report by the Central Bank”.
Is anyone going to lose their job over the scandal?
There is no indication that anyone will be out of a job over the scandal, just yet, anyway. The CEOs of the banks gave a commitment to the minister to deliver on redress and compensation. Donohoe said he will be “holding them to account” on that.
But he added, that for many, the “tenure in their jobs took place after many of these decisions happened which generated the issue I am now addressing today”.
Be that as it may, I have said to all of them, will be holding the banks accountable to how they respond to this issue.
He said the Central Bank has “sanctions open to them” and it is a matter for them to determine when and if they should be used. It would appear that any of these consequences for individuals and individual banks will have to wait until after the publication of the two reports.
How much will this cost the banks and what is the final figure of those impacted?
Donohoe said he did not know what the final cost would be, but said that he believes the Central Bank Governor Philip Lane when he states that some 20,000 people could be impacted. Others have predicted the numbers could be a lot higher.
What about those customers that already accepted compensation from their banks, many of whom who only received nominal fees and not the full amount taken from them?
The minister said there are believed to be some 7,000 customers that do not fall within the probe being carried out by the Central Bank. One TD in the Dáil yesterday said some of these customers have had sums of money up to €40,000 taken from them, but were only given €4,000 in redress.
Donohoe said those customers who believe they were treated unfairly by their bank should get in touch with the Central Bank. He said it can determine if or how much more money they are entitled to.
“They [the Central Bank] can adjudicate over individual decisions,” he concluded.
Beginning the debate on Fianna Fáil’s motion on the tracker mortgage scandal, Michael McGrath said the bankers “will sleep well tonight” after the reaction by the government today.
With additional reporting by Christina Finn
If you have been affected by the tracker mortgage scandal, we want to hear your story. Get in touch by sending a message to trackermortgage@thejournal.ie.
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It’s not disgraceful, it’s criminal.
@JimmyMc: It’s only criminal when Joe pleb commits fraud. When the banks rob their customers, it’s “an oversight” or “miscommunication”. Sure aren’t they listening and learning now (every bank having been caught out pulling the same stunt) and are focused on putting this right.
This will explain it …….
Can the banks please stop attacking the country!
@JimmyMc: far worse than that…its acceptable in this country. Nobody held accountable…nobody looses their jobs…nobody faces criminal sanction…the golden circle rolls on and the staus quo is maintained. Back to sleep Ireland.
@JimmyMc: Conspiracy to defraud is the way to go. Hard to prove but let all be aired.
Jail the fraudsters, it’s the only language that will put manners on them, end of.
@Conor O’Neill: they won’t because there allowed to
@JimmyMc: completely agree they should all be in jail its laughable a sorry get you off without jail time, sanctions or fines
What the banks did was premeditated. They committed fraud. Fraud is criminal. Those people affected should be reimbursed AND compensated, plus interest. Those who lost their homes should have houses provided for them at current market value, compensation, plus interest. Those who lost loved ones should get all of the above and criminal proceedings against bank officials starting with CEO’s and filter downwards. Nothing, nothing happens in terms of policy in the banks without somebody signing off, that starts at the top. Those of us not affected need criminal proceedings to appease us. Nothing short of this is acceptable. If that doesn’t happen, within a certain timeframe then we should all show up at our respective banks doors and withdraw our cash.
@Ciaran De Bhal:
No let’s see how long it takes them to admit what they did to SME’s, most notably Ulster bank through GRG and West Register. Actively putting them to the sword in order to take their assets on the cheap, and miss selling hedges/swaps as in the U.K.
Confirmed by the FCA and Tomlinson report.
I’m confident they will continue to fight tooth and nail, before being brought to their disgusting knees
@Ciaran De Bhal: everyone e.mail your local TD.
These guys genuinely need to be put in jail.
@Ciaran De Bhal:
Fine Gael, the Party of “Law” and disorder.
And today we hear that the number of affected mortgage holders has once again risen to a new total of 40,000.
Fraud is a criminal offense unless you are a banker, politician or a Senior Garda.
@Ciaran De Bhal: very well said
I closed my AIB current account today. I can’t trust them to hold my wages and primary source of income after all that’s happened. Also morally, it was impossible to choose another Irish bank. switched to a German online bank (with zero fees :) )
@Paddy Reid: How does that work Paddy? Do they post out a debit card, and you get charges for third party ATM usage?
@Paddy Reid: which bank? Think ill do the same
@jon-boy55: the guys at http://www.paywithfusion.com do pretty much the same
@jon-boy55: @Fin Tastic:
I’m assuming it’s N26.
@Wreck Tangle: Yeah, it’s N26. Pretty sweet current account. Super easy to set up. https://next.n26.com/en-eu/
@Wreck Tangle: Thanks
@Paddy Reid: I’m five years with Britline, part of CA Agricole. Way, way cheaper.
How the hell are these people allowed to retain their jobs? All in a day’s work to them, no doubt they’ll be back at the golf club at the weekend as if nothing happened and meanwhile the devastating consequences go on for those people wrongly swindled.
@dodofrey:
It’s a charade. Bankers and politicians share the first class carriage on the gravy train. Choo choo next stop Consville.
@Tweed Cap: And the 19th hole
“Having done so, it is right that we demand, on behalf of the people, that the banking sector now, more than ever, operates in the best interests of its customers.”
Hollow words from a hollow little, weasel of a man.
@Arnold Lane: How does the saying go..
“It’s better to ask for forgiveness than to ask for permission”.
@Dave Sherman: ‘easier’ not better
What the people of the republic want arent sorries and new legislation we want to see justice and accountability. If I don’t pay my lpt it’s taken off me if I don’t pay my rte tax I’m put in prison if I don’t pay my road toll I either don’t get through or penalties are added until it get so big it’s justified to be brought through the courts. What do the bankers get…..????
@Thomas Meaney: bonuses
@Thomas Meaney: promotions
They’re only sorry they got caught!
@Alan De Morrighan: Absolutely, if I were to walk out of a bank with millions causing enormous pain and suffering to tens of thousands of their families and hundreds of deaths, I’d be jailed for a significant length of time. Saying I’m sorry just wouldn’t be enough, the law would expect me to pay for my crime.
It’s not good enough for these bankers to conspire to commit fraud on an enormous scale and only when they’re dragged, kicking and screaming, before the people do they reluctantly say sorry. I don’t think there’s anyone who’s naïve enough to believe them – except of course their pals, the politicians, almost every one of whom are equally as guilty. They literally have blood on their hands.
I would hazard a guess that the figures we are seeing are the tip of a very large iceberg.
Can we be sure that the banks have correctly applied the correct interest rates on all loan facilities.
@Fiona deFreyne:
Well it was stated this week that Irish Banks are, on average, three times more profitable than their counterparts within the EU.
Incredible! So much for competitive advantages for Ireland of EU and Euro membership!
Some banker know-all stated in the media quite recently that high bank related charges are down to a “risk Premium” required in conducting banking biz in the Republic.
OK so!
Risks from within, is it?
I got taken off my tracker mortgage on the advice of the bank and after the crash when my house value plummeted by over 50% and I struggled to make repayments not only would they not put me back on the tracker rate I was entitled to but I got a phonecall from a bank official advising me to sell the house and pay off as much of the loan as I could. It would’ve left me with no house and about €100k still to pay. I hope the ppl behind this mass robbery and those who contributed in order to get some bonuses for themselves are all held accountable for their actions.
Unacceptable. More than a disgrace. We’ve been let down by every single regulatory body and now government as well. *insert all the cursewords*
@Caitríona Redmond:
Closing my account this Friday.
Moving to either Post Office German bank or Credit Union.
As sincere as a Banker
As honest as a Banker
As compassionate and understanding as a Banker
As humane as a Banker
As helpful,and sensible as a Banker
I don’t think so.
The role of banks is to screw their customers, repeatedly, persistently and occasionally to tax tax payers for a ride.
Pascal should be kicked out now, (because he won’t resign). He’s after making a mess of the property tax in the budget with the stamp duty, didn’t know what he was doing, and he’s made a huge mistake here by announcing a press conference on this today, and what is he do, absolutely nothing!
That’s great and fantastic for those affected directly and so it should be but what about the rest of us? What do we get? Will we get justice? What will the ramifications be?
TOO big to fail ,now too big to be held to account ,justice is for the little people in ireland ,these guys can do as they please and the politicians will bend over backwards for them .modern smutty little ireland .
Banks are off concocting their next scam.
@Fiona deFreyne:
You’ll rarely see the resident Fine Gael trolls around these articles. Even they’re embarrassed.
When Joe Public commits fraud he gets a public hearing. When Irish bankers commit fraud they get a special private visit from a prominent Irish politician – behind closed doors. Minister of finance no less. They sell it to the gold fish electorate as being “hauled in” followed by a very stern press release. Ireland has too many sleepy heads to effect any real change.
@Fiona deFreyne: Which will be resting new fees to negate any fines or levies that are imposed on them. In other words, the people are fined in effect. That’s the Fine Gael way.
Rather than all this PR rubbish tellus:
How much cash they are paying back?
How much interest returned?
How much in normal damages?
What punitive and exemplary damages?
Copy of the Financial Ombudsmans report into the conspiracy with names not redacted?
List of charged Public Prosecutors are bringing?
Date of the criminal trial?
Confirmation cells are ready for receipt of bankers?
Abject performance from Fine Gael – this is a complete sop to the banks. Lane said majority by Christmas- days later Paschal and Leo cave in. Shame on Fine Gael.
What do they have to do in order to be put in jail !!!
Nothing short of “Gang style criminally”. If only our self serving VIP ministers would Step Up!.
Iceland quickly sorted the “Untouchable bankers”. Our TD’s bend over!!!.
@j4VEpUO8: “criminality”
The most grievous culprit in this scandal is the Central Bank of Ireland. This is not to say that the banking institutions themselves do not deserve the savaging they are getting, they do and more besides. But it is the Central Bank who are charged with regulating the banks on behalf of the citizens of the country and they failed. One could make excuses for them were it not for their complicity in the financial crisis of a decade ago. When one looks at the manner in which it has gone about it’s a business over the last twenty years, there is a strong argument to be made for the complete disbandment of the organisation and the internment of every person still alive who has been on the board since 1995. Maybe then we might get answers as to what they have done and for whom and why.
Theses apologies shouldn’t even be given airtime/publicity. How much wind does a criminals apology carry just before sentencing. Joke of a country. How long has this been highlighted not a single individual singled out. Who was the first signature to ok this for the rest of the monkeys to follow.
Tis FG is a disgrace. Pascal and the gov have the power to effectively deal with it, even prevent it in the first place if our gov were any good!
Class action is the only thing that would work… but this is Ireland, we can’t take one
He intimidated them with his dimples.
If you walked in off the street and robbed a bank you be looking at a 15-20 stretch inside. These guys robbed people and they seem to think saying sorry is enough. It isn’t and must be dealt with for the good of our society. FG thus far have failed us all. Lock them up.
CAB need to be brought in to go through the banks files with a fine tooth comb to get to the truth as to who authorized this theft of people’s money. Then prosecutions should quickly follow before the banks have a chance to put in place their next scam. Only seeing execs in handcuffs will make the banks think twice before committing their next fraud. Has nothing been learned from the crash and why has nobody heard from the financial regulator since this scandal broke.?
It would make you wonder why the government won’t act. There must be a personal interest. We need functioning banks without doubt but Noonan allowing them to write off losses that the taxpayer covered? That’s criminal. And when you get that sort of treatment what’s there to be scared of be it bullying mortgage holders or the big payoffs to staff & management
Unlike any interaction with Irish banks, words are cheap.
Listening to McGrath on NewsTalk, calling for accountability from the banks. Joker! Accountability in FF was very scarce over the dire financial state of the country in the recent past, when they almost bankrupting the country while they were in gov!
@Adrian: how could the government almost BANKrupt a country???? They don’t lend money up in Dáil Éireann you dope.
@Gareth Cooney: that’s a dopey comment
“Sorry, sorry, really sorry. Can’t say how sorry I am. Right, that’s that sorted.
Same time again tomorrow? “
Pascal ya corrupt ***t
I don’t know what a tracker mortgage is.
@Sulloire: it’s doesn’t matter now
@Sulloire: It’s a mortgage that tracks your financial history and also in real time. Any inkling of a problem with your cash flow, and you’ll get the Aladdin’s lamp treatment, or the Snow White apple treatement. Two years down the line you’ll suffer.
@Sulloire: by the time this debacle is over you will be a genius on trackers…….!!
And once again slithering around in the background is Noonan, smirking at the misery he has inflicted on ordinary people.
So more regulation to add to the regulation that was already put in place to protect the consumer – the same regulation which made it unprofitable for banks to operate so they had to find new ways to make money!!!! Hmmmm an answer to an Irish problem me thinks
Sorry they were caught…
Has the law been broken and if so will anything be done about it ?? other than a government minister mouthing off saying things are disgraceful and unacceptable blah blah blah.
There are 1900 people working in the central bank. Surely they could deploy a team to the head offices of each major bank to monitor major banking decisions and to carry out spot checks on customer accounts.
Also there should be time limits on banks to recompense customers with massive interest rates applied should they expire.
@Gareth Cooney: good comment
Will criminal sanctions be applied?
These evil bankers deserve jail.
What regulations are to be put in place to prevent recurrence?
we will never learn
What about the PPI scandal?
Thats grand so lads.
Now lets get back to the business of robbing people again
Do you know who’ll be paying all of this compensation?
Sorry is not good enough, but, hey, it’s Ireland. They’ll go and confess their sins and be back at it tomorrow.
Only sorry that got caught, nothing more.
This is only the tip of the iceberg thousands more had their trackers taken off them and have not been identified or deemed “not impacted from the banks own reviews
Every criminal is sorry once they are caught.
So sorry, so! so! sorry, ……..we were found out!!!!!
Oh they apologise sincerely. Well sure all is forgiven so. It’s more like we sincerely meant to screw our customers after they so kindly bailed us out of trouble.
At the very least these gangsters should be FIRED from their jobs and people effected compensated significantly.
F#&k the banks, buy Bitcoin & bury these c*%ts
You really think these parasitical vultures give a f”ck, only think they regret that this all came to be in the public domain, banks just like politicians are never to be trusted whatsoever under any circumstances
@Jonny: True.And hefty pensions and bonuses were and are being paid to the executive
big birds!
The minister wants two reports. Really ? Why ? When it’s patently clear that the banks acted in a criminal manner. Take action minister, do your job and to hell with more reports
Who’s the Bank robbers now? Bet no one goes to jail but a poor man would be locked up by now same nonsense white collar crime no one held responsible and the boys on the gravy train won’t do much its simple jail those who are at fault
Sorry for What though!?! Intentionally screwing preople over and even forcing some out of their homes…like PTSB going to the Supreme Court to try and get out of its contractual obligations to these customers!! So what are they Sorry for exactly!?
One child runs amok, it’s the child’s fault. When all the children run amok it’s the parents’ fault. Why isn’t the Central Bank held accountable? Oh wait, silly me.
Simple solution everyone who is paying back a mortgage to these banks should stop paying until there is adequate compensation paid to those affected and criminal charges brought to those involved. I mean think about it what would they do if the masses stopped paying their mortgage, not much they could do without starting a riot in the street . Irish people need to stop being sheep any other country in the world the people would take to the streets over less than this but here we just read the news for a few days while every minister and public figure calls for this and that to be done waste millions on bulls#!t investigations then it blows over and f#€k all happens to those responsible. And they thought the Marxist system was crazy not half as messed up as this one
@Andy mc Laughlin: Pascal wants reports, sigh
Big announcement? Does gov think people are stupid as this changes nothing. The public demand a criminal investigation
If you pay peanuts you get monkeys ,well what did we get and we paid bonuses on top of massive salaries
JAIL.JAIL.JAIL. blood on their hands.
Michael Noonan knew about this & did nothing a nice legacy he has left ,
Convenient that the TDs are slaying the big bad banks and the massive Garda dishonesty scandal has been silenced.
Nice big fat fines for all the hoors. Really hit them where it hurts and make them think twice about scamming people again.
have your say