Dáil Éireann Debate, Tuesday - 24 January 2023
106. Deputy Matt Carthy asked the Minister for Finance the engagements he has had with the Central Bank regarding residential mortgage holders who were overcharged as a result of the tracker mortgage scandal and have had their mortgage contracts sold to third parties; and if he will make a statement on the matter. [3096/23]
View answerChanges in the interest rate on a tracker mortgage are determined by any movement in the underlying rate being tracked, and in line with the terms and conditions of the mortgage contract, these changes are applied to tracker mortgages customers by their lenders. This approach applies to all tracker mortgage customers including those that have remained with the original lender that their tracker was drawn down with and customers whose tracker mortgages have been sold to a third party.
Where a loan is sold or transferred to another regulated entity, the protections that were available to borrowers prior to the transaction continue to be in place with the new owner. Under the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 if a loan is transferred or sold, the holder of the legal title to the credit must be authorised by the Central Bank and must comply with Irish financial services law that applies to ‘regulated financial service providers’.
This ensures that consumers whose loans are sold or transferred, maintain the same regulatory protections, including under the various Central Bank statutory Codes of Conduct, such as the Consumer Protection Code 2012 and the Code of Conduct on Mortgage Arrears 2013.
The Central Bank also advises that the protection of mortgage loan borrowers, including those in arrears, is a key priority and that it will continue to supervise compliance by regulated entities with the CCMA and will investigate any issues that arise, including patterns of behaviour which suggest that the CCMA process is not being followed.
I would also add that the Central Bank does keep its consumer protection framework under review and, as the Deputy will be aware, the Central Bank is currently undertaking a process to review its Consumer Protection Code and a discussion paper on this is now open for public consultation.
In relation to the tracker mortgage examination, the Central Bank's final report of the supervisory phase of the examination was published in July 2019. It outlined that over 40,000 customer accounts were impacted by lender failings and that almost €700 million of redress and compensation was paid to impacted borrowers. The Central Bank has also concluded enforcement actions and imposed fines on lenders for their tracker related failures which were BOI €100.5m; AIB/EBS €96.7m; Ulster Bank €37.8m; PTSB/Springboard €25.5m; KBC €18.3m.
The Central Bank has also informed me that it will now monitor developments in the Financial Services and Pensions Ombudsman (FSPO) and the courts in relation to the tracker issue to see if any further action is required by it arising from decisions which may be made in those for fora.
