I propose to take Questions Nos. 189, 192, 194, 198, 200, 202, 214 and 250 together.
As the Deputy is aware, the Central Bank, as the regulator with the appropriate powers, has been conducting an industry-wide examination of tracker mortgage-related issues. Through the examination, the Central Bank has publicly and unequivocally committed that all affected customers will be identified and to use the full range of its regulatory powers to ensure they receive redress and compensation. These investigations by the Central Bank are statutorily mandated and can lead to significant sanctions. Therefore, as Minister for Finance, I must be cautious not to jeopardise any potential enforcement actions or prosecutions, and refrain from comment on any particular customer or group of customers whose case is under review as part of the ongoing process.
I met with the Central Bank and each of the relevant banks during the week of 23 October, to receive an update on the tracker mortgage examination, and make it very clear that this Government is determined that the banks resolve this matter as quickly as possible.
Following these meetings, all the banks have committed to working with the Central Bank to fully meet its requirements. This will likely result in further affected customers being identified. I expect this aspect of the examination to be finalised as soon as possible so as to minimise the uncertainty for such customers, and for redress and compensation for those further customers to swiftly follow.
The tracker examination is the largest and most complex supervisory investigation undertaken in the context of the Central Bank's consumer protection mandate, involving the review by lenders of more than two million mortgage accounts.
The Central Bank has advised me that the ongoing examination requires lenders which offered tracker interest rate mortgages to their customers to review all mortgage accounts from the date when the lender commenced offering tracker interest rate mortgages until 31 December 2015. The review encompasses all mortgages in respect of both Private Dwelling Houses and Buy-to-Let properties that i) originated on tracker interest rates; ii) had tracker interest rates applied at any stage during the term of the underlying mortgage agreements; and/or iii) where the underlying mortgage agreements provided for contractual rights to or options for tracker interest rates at any stage during the term of the agreements.
The Central Bank issued a statement following our meetings, which can be read here: https://centralbank.ie/news/article/statement---tracker-mortgage-examination
Details on the examination framework can be found here: https://www.centralbank.ie/docs/default-source/consumer-hub-library/tracker-issues/appendix1-framework-conducting-tracker-mortgage-examination.pdf?sfvrsn=4
The Central Bank's regular updates can be found here: https://www.centralbank.ie/consumer-hub/tracker-mortgage-examination.
AIB have provided me with the following information:
"The tracker examination programme is ongoing and is subject to the final agreement and approval of the Central Bank.
The review, working at all times within the Central Bank framework, identified issues relating to contractual matters, inadequate levels of transparency and poor quality customer information.
AIB is advanced in the review and has redressed and compensated the majority of identified impacted customers.
(1) Customers no longer on a tracker
- At the end of September 2017 AIB had identified 3,416 customers who were not on the tracker mortgage rate to which they were entitled. 91 % percent of these have had their trackers restored (to an average tracker margin of 1.2%) and have also been redressed and compensated. The remaining cases will be completed by the end of the year.
- The bank estimates a further 170 cases will be identified by the end of the year and these have an estimated completion date of end Q1 2018.
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Customers no longer on a tracker
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Customers no longer on a tracker
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Redress and compensation status
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Identified as at Q3 2017
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3,416
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91% complete
100% by year end
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Identified by year end (estimated)
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170
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To be completed by end Q1 2018
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Total
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3,586
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(2) Customers on a higher tracker margin
- During the review AIB also established that some customers, who remained on a tracker mortgage, were incorrectly charged a higher tracker margin.
- The majority of these were impacted for a short period of time and by up to €500.
- Two thirds of these customers will be redressed and compensated by the end of this year, with the remainder to be completed by the end of Q1 2018.
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Customers on a higher tracker margin
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Customers on a higher tracker margin
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Redress and compensation status
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Identified as at Q3 2017
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736
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53% complete
100% by year end
|
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Identified by year end (estimated)
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280
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To be completed by end Q1 2018
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Total
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1,016
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From December 2015 the review has been conducted in accordance with the Central Bank framework and independently assured by KPMG. The programme includes putting customers back on the correct rate, refunding, compensating, and access to an independent appeals process."
