Dáil Éireann Debate, Tuesday - 24 October 2017
1. Deputy Michael McGrath asked the Minister for Finance the nature of his planned engagement with the banks in respect of the Central Bank tracker mortgage examination; and if he will make a statement on the matter. [44937/17]
View answer2. Deputy Pearse Doherty asked the Minister for Finance the steps he will take to ensure banks and persons responsible for the tracker mortgage scandal face the consequences of their actions, in view of the fact that at least 13,000 mortgage holders have been affected; and if he will make a statement on the matter. [44947/17]
View answerWe all know that the Minister, Deputy Paschal Donohoe, has been meeting the banks over the past two days in respect of the tracker scandal. I have two key questions to which I think most people want an answer. Can the Minister give a categoric commitment to all those affected by the scandal that they will get justice, that they will get their money back and that they will get compensation? Can he give a commitment that there will be accountability as to how this happened in the first place and that there will be a thorough investigation that gets to the bottom of how exactly this could occur?
I have given a commitment to Deputy Pearse Doherty that we would take his question also. The Deputy is delayed, apparently. If the Minister is amenable-----
Deputy Doherty is here.
I am always happy to facilitate Deputy Pearse Doherty.
Very good. My apologies.
I propose to take Questions Nos. 1 and 2 together.
I have just concluded my meetings with the CEOs of Bank of Ireland, AIB, Permanent TSB, Ulster Bank and KBC to discuss the tracker mortgage examination. The Government and I are not satisfied with the progress lenders have made to date, and believe that impacted customers should by this time have had their tracker mortgages restored and, where appropriate, have received redress and compensation.
The Central Bank published an update on the tracker examination on 17 October. As part of this update, the bank released details of its engagement with lenders thus far and the enforcement actions the Central Bank has so far taken. As Deputies will be aware, the Central Bank has already concluded an enforcement investigation in respect of tracker mortgage-related failures identified at Springboard Mortgages Limited, and in that instance it imposed a monetary penalty of €4.5 million on Springboard.
Currently, the Central Bank is pursuing investigations into tracker mortgage-related issues arising in both Permanent TSB and Ulster Bank Ireland. Two further enforcement investigations into other lenders are in train, and in its recent appearance before the Oireachtas Joint Committee on Finance, Public, Expenditure and Reform, and Taoiseach, the Central Bank indicated that further enforcement investigations can be anticipated.
The Central Bank has statutory reporting obligations to An Garda Síochána and other agencies where it suspects a criminal offence may have been committed by a supervised entity. The Central Bank takes these obligations very seriously and complies with them on an ongoing basis as appropriate. However, decisions in respect of this are solely a matter for the Central Bank, independent criminal investigation bodies and prosecution authorities. Nevertheless, I would strongly support the Central Bank's pursuit of its tracker mortgage-related investigations and any other necessary actions to the fullest extent and as expeditiously as possible.
However, let me be very clear on this matter. I believe that impacted tracker mortgage borrowers have been treated disgracefully by mortgage lenders, and that many borrowers have incurred considerable losses and in some cases even more significant harm. We should be clear that it was the mortgage lenders that caused this harm to their customers and that the primary responsibility for rectifying the problem rests with them. Therefore, all lenders need to bring the Central Bank examination to a conclusion without any further delay, and to do so to the satisfaction of the Central Bank and more particularly to the satisfaction of their impacted customers. The main point I want to make now is that the time has arrived for banks to finally act in the best interest of their impacted mortgage customers. Of course, they should have done this from the beginning. The meetings have now concluded with the banks. I will have more contact with them over the course of the day and when this has concluded I will update the House during Private Members' business tomorrow evening.
The banks, or at least some of them, have threatened to sue the Central Bank for doing its job, which is seeking to protect customers. We know that 10,000 customers have not got the money back that was wrongly taken from them, not to mention any compensation from their lenders. There may well be many more. It is certainly not the case since this emerged that the banks have dealt with it in an open, honest or transparent manner. Any independent reading of the Central Bank report last week will tell us that the banks had to be dragged kicking and screaming through this process. They tried to minimise the amount of compensation. They did not declare all the customers who were actually affected. I will repeat my two questions. Can the Minister give a categoric commitment to everyone caught up in this that they will get justice? Can he give a straight answer as to whether there will be accountability on how this could happen in the first place?
I will echo some of the comments Deputy Michael McGrath has made. Let us put this into context. We use all these words about redress and examination and all the rest. The banks, some of which are State-owned and in some of which the State is the majority shareholder, are holding on to customers' moneys unlawfully. There are 10,000 that we know of and there may be many more thousands on top of that figure. The quantum of money the banks are holding unlawfully at this point, which they have taken from their customers, is in the region of €300 million.
Finally, the Government seems to have woken up and the Minister has brought the banks in to give them a dressing down. Nine months ago, I was challenging the Minister to do just that. What we need now is clarity. Is there going to be individual accountability? This Dáil spoke with one voice in January of this year, when Sinn Féin used its Private Members' time to propose that the Government put forward any such legislation identified as being necessary as a result of the examination to ensure that individuals and financial institutions can be held accountable for any white-collar crime that may have occurred. Has the Government carried out any examination?
Can the Minister give a guarantee to those who are watching out there, the victims of the tracker mortgage scandal, that they will receive their money back into their accounts before the end of this year and that they will receive adequate compensation?
In respect of the desire of the House to see accountability for how our citizens have been disgracefully treated in this matter, I remind Deputies that I made the point a moment ago that the Central Bank has already imposed a fine on Springboard in respect of this and other matters. It is my strong view that the manner in which banks have handled the probe for the Central Bank, and the recent behaviour of the banks in the management of this issue are unacceptable. It shines a light not only on the culture of our banking system at the time this issue originated, but also on the culture of our banking system now. Neither is acceptable to me.
I am supporting the Central Bank in its work around the probe. I believe that all who are owed money should have it repaid to them and I am supporting the Central Bank in this regard. In regard to accountability and the outcome of this process, which Deputies Michael McGrath and Pearse Doherty have raised with me, enforcement proceedings are already under way by the Central Bank in respect of two banks. This shows the determination of the Central Bank to move this matter to closure. I encourage the Central Bank to use all the powers available to it in regard to this issue, as I believe it will do.
I met the Governor of the Central Bank, Professor Philip Lane, yesterday, to discuss this issue. I am confident that all of the powers that are available to the Central Bank will be used if the latter stages of its probe vindicates their use and if the bank can stand over conclusions that emerge from it, which I believe it will be able to do. In regard to the issues raised by both Deputies today, my message is that the people who are owed money should have it repaid to them. They have been treated disgracefully by our banks in the latter part of this probe and I want to see that changed.
I respect the independence of the Central Bank but fines are not the answer. Springboard Mortgages has come through this process with only a fine of over €4 million. If the outcome in respect of the other banks that are some way through this process is fines, they will be passed on to customers and this will happen again because there will have been no accountability. Springboard Mortgages has concluded the process and there has been no accountability whatsoever in terms of how this happened and who was responsible. If that is a taste of what is to come, we are going nowhere.
What people want to know is when this nightmare will be over. We know that in respect of up to 10,000 customers, the banks are still sitting on their money. They have not repaid them or given them compensation. Did the Minister get a commitment from the banks as to when all of the customers who have been identified, not to mention the many others who we suspect are also involved, will actually get their money back? That is the first step. I do not think it is too much to expect banks to give people back their own money.
The Minister's response if this was day one of this scandal might be appropriate but it was in 2010 that the Central Bank wrote to the banks about the tracker mortgage issue and it was in 2015 that this examination came to light. Two years ago, the Central Bank allowed the banks an additional year to come up with the final figures and yet in October 2017 we still do not have those figures. The Minister said that his message is that people should have the money returned to them. In regard to the banks in which the Government is a majority shareholder, did the Minister instruct them to return the money immediately - it was unlawfully taken and should be put back into customer's accounts immediately - and did he tell them that if they did not do so he would sack the boards of those banks, Permanent TSB and Allied Irish Banks, AIB and that he would not support the re-appointment of the CEO of the Bank of Ireland? Did the Minister tell the banks that he would use his powers to appoint real public interest directors to the boards of banks that were subject to the guarantee in 2008? Did he ever telephone any of the public interest directors and ask them what they had been doing on the boards for the past two years as the banks were dragging their feet?
What we need is clear deadlines. We want to know if the money will be back in individuals' accounts before the end of this year. In regard to the motion brought forward by Sinn Féin on 24 January this year, to which the Government's response was that it would bring forward legislation on individual accountability, what has the Government done in regard to individual accountability in the banks, because this scandal will reoccur in a different form in years to come if we do not do that now?
I have made it very clear that the behaviour of the banks in terms of their failure to return moneys properly due to people is unacceptable. The hurt and harm that has been caused to citizens as a result of the manner in which the banks have handled this issue is not acceptable to me as Minister for Finance and as a shareholder in a number of these banks. I have heard much talk of cohorts and consumer affairs. What I am aware of is the hurt that has been caused to citizens in our State in terms of how this matter has been recently dealt with.
The Central Bank has made use of the powers available to it under the legislation brought in by the previous Government in 2013 to deal with this issue. The Central Bank has been using all of the tools available to it to resolve this issue. I am supporting it in its work to bring this issue to a conclusion. Too many people are waiting for their money to be repaid. Too much confusion still exists in regard to where stands this issue. In the engagements I have had with the banks on this matter, I have made clear to them that this is a disgrace. This matter should have been resolved by now. I will use the influence open to me as Minister for Finance to bring clarity to this issue in the coming days. I will update the House at the first opportunity available to me to do so, which I expect will be the Private Members' motion tomorrow evening.
