Dáil Éireann díospóireacht -
Tuesday, 24 Jan 2017

Vol. 935 No. 3

Tracker Mortgages: Motion [Private Members]

Deputy Pearse Doherty

I move:

That Dáil Éireann:

notes that:

- the wrongful removal of tracker mortgage rates from mortgage holders, or a failure to restore mortgage holders to tracker mortgage rates they were entitled to, has affected thousands of families;

- the damage caused by the action of the banks involved goes far beyond a purely financial effect and that the effects it has had on the health and social well-being of families, along with the accompanying social exclusion, must also be considered;

- the confirmed cases number at least 11,700 and that many more are still likely to emerge with the Governor of the Central Bank of Ireland stating that up to 15,000 is a reasonable estimate;

- the unique economic circumstances prevailing at the time this wrong doing was ongoing resulted in a more pronounced effect and impact on families affected throughout Ireland;

- the occurrence of this behaviour across the banking system suggests a co-ordinated and deliberate attempt by Irish banks to deprive thousands of families of their rights;

- the banks have admitted that dozens of families have lost their home as a result, with AIB admitting to 14 cases, Ulster Bank to 15 cases, Permanent TSB to 22 cases and other banks not yet disclosing the number;

- there are also the homes which were surrendered and were a voluntary or agreed sale, the numbers of which are not yet captured but should also be considered a loss of home;

- in October 2015 the Central Bank of Ireland finally launched an industry wide examination into this practice, years after evidence of its existence emerged; and

- former Central Bank of Ireland head of financial regulation, Matthew Elderfield, told the Committee of Public Accounts, in 2013, that he did not believe the current legislation on the Irish Statute Book was strong enough to bring people to account for white collar crime;

commends the families and advisers who have campaigned to bring this scandal to light and pledges its support to all those affected;

condemns the widespread and scandalous abuse of mortgage holders’ rights carried out by multiple banks in which tracker mortgages and the applicable rates were denied to those who were entitled to them;

supports a comprehensive redress scheme that truly works for the customers affected, with a full right to access to tracker mortgages at the rate agreed as per the contract or at the rate applicable at the time the contract was entered into and compensation taking into account the financial and social impact of the bank’s behaviour;

questions the delay in the Central Bank of Ireland's actions in carrying out an industry-wide examination and expresses concerns that no deadline is in place for the banks to conclude their investigations and to put in place a redress and compensation scheme;

calls for the Central Bank of Ireland investigation to uncover the grounds under which each lender decided or chose to carry out this level of wrongdoing;

believes that a major overhaul of existing law is required to ensure that individuals can be held responsible before the law for their actions in financial matters;

calls on the Government to bring forward legislation to ensure that individuals in financial institutions can be held accountable for white collar crime; and

calls on the Central Bank of Ireland, An Garda Síochána and the Office of the Director of Corporate Enforcement to co-operate, with a view to establishing if individuals, as well as corporate entities, can be held accountable for their part in this scandal.

It is my honour to move this motion which states clearly and loudly that the Dáil stands with the victims of the tracker mortgage scandal and that we want to see the banks sort out the mess they created. Moreover and just as important, we want to see accountability. We want to see those who oversaw this theft and the stealing of millions of euro from up to 15,000 Irish families held accountable. That is the message I want to send loudly and clearly and I hope all Members can support that call. It also includes recognition of the achievement of those mortgage holders who stood up to the banks and won round one. Some have shared personal details of the impact of this scandal on their lives in an honest way which we must appreciate and applaud. I also recognise and pay tribute to the work of Padraic Kissane and others in advising victims and raising this issue.

I am not going to pretend that this scandal had anything to do with system errors or misapplications. I am sure it was deliberate and calculated. Some customers were telling their banks for years that they should have been entitled to a tracker mortgage, but a deaf ear was turned. Thousands of families have been stripped of their rights and suffered hardship because of a decision taken by men in suits acting in the wrong.

We will hear many figures in this debate, rightly so. However, we cannot lose sight of the social impact of what has occurred. I have been inundated by victims of the scandal who have been telling their story and seeking political and practical support for some time, especially this week. What stands out for me is the level of anger at what has happened, not because of figures on a page but because the banks, in doing what they did, have caused stress, emigration, the loss of family homes and other assets, as well as other very personal damage. How can a bank compensate the family that could not afford to send their child to college? How does one account for the terrible cost of that decision? How does a bank compensate the family, the father of which had to emigrate to ensure they would be able to afford the home on which they were being overcharged? What about the 100 or so families who lost their homes simply because the banks were making them pay more than they should have been? How many losses of the family home about which we will never know because they were disguised as so-called voluntary surrenders?

We must bear in mind that much of this theft happened at the worst of times. The economy had collapsed, in large part due to the activities of these very same banks. Unemployment and emigration were at extremely high levels. It was at this time of extreme difficulty for almost all families that the banks decided to twist the knife in for so many. We also know that they did not suddenly have a conscience. This swindle was in full swing until recently. Every month they were taking from families and they would have carried on were it not for mortgage holders standing up to them. The potential scale of the theft would be close to €1 billion now if they had not been caught out and I have no doubt that they would still be at it. I am aware of staff at Bank of Ireland who seem to be completely excluded from the redress scheme. Where is their redress and the justice for them?

For many, it is still going on. The banks are still trying to minimise what they did and weasel out of their responsibilities. The chief executive officer of Ulster Bank told me in December when he appeared before the Oireachtas finance committee that the majority of victims would receive letters before Christmas. From what I hear, that was simply an expedient comment with no basis in fact. There are hundreds, probably thousands, of families who each month receive an identical letter from their bank telling them that they are under review. Families who know that they are in the right have to wait until the bank that stole from them admits to the fact. In the meantime, they are still being overcharged.

Others have received letters stating the bank has returned or will return them to a tracker rate. Any old mortgage called a tracker rate mortgage is not what they signed up to; it was at a particular rate at a particular time. At this point the banks should not be allowed to define what a tracker mortgage is. Some victims have been on a tracker mortgage at Permanent TSB, for example, at a rate of 3.25%, plus the European Central Bank, ECB, rate, when, by all logic, they are entitled to a rate of 0.75%, plus the ECB rate. There is a difference of 2.5%. The Central Bank needs to ensure customers will be returned to the tracker rate to which they are entitled, not the tracker rate the bank would like to them to be at. The banks must fix the mess they created, stop the weaselling, return the money they stole and put things right. That means putting people back on the right rate, not any old rate and calling it a tracker mortgage.

At its core, this scandal is about the banking system. Why did this happen? When the Governor of the Central Bank, Mr. Philip Lane, appeared before the finance committee, he stated what was blindingly obvious, “Put frankly, there are far too many cases where it turns out there was a misapplication.” That is Central Bank speak for the banks knew well what they were doing, but that is not to let the regulator and political overseers off the hook in the slightest. There has been a massive blind eye turned to this scandal at a political level. We know that two of the biggest offenders, AIB and Permanent TSB, are owned by the Minister on behalf of the people. The Minister has not called in their chief executive officers or boards to tell them that this is unacceptable. If a semi-State body was found to have taken hundreds of millions of euro out of people’s pockets through overcharging, its chief executive offer would be sacked. When the banks do it, however, there is an examination and a redress scheme, which is essentially a euphemism for getting back what already belonged to someone.

AIB stated that, at the last count, 3,003 overcharged accounts had been identified. It is a 99.9% State-owned company which has been overcharging thousands of its customers - citizens - to the tune of over €100 million euro.

The Minister should have called in the CEOs and the board of these State-owned banks and asked the questions about what was going on under their noses. I still appeal to him, at this late stage, to do just that. He should be on the telephone to the banks first thing in the morning seeking answers on behalf of the 15,000 citizens who were swindled by those same banks.

The question also needs to be asked why it took until October 2015 for the Central Bank to launch an industry-wide examination. Thanks to mortgage holders taking cases with the Financial Services Ombudsman, this scandal had already been uncovered many years before. Once again, when it comes to regulatory scandals, it seems the Central Bank is way behind the curve. Even now there is no deadline imposed by the Central Bank to sort out this mess. Let us be very clear about this, the blame does not lie with the Minister or the Central Bank for this crisis. They should have done more but it was the banks across the board that put this practice into place. They are the ones responsible. The motion before us calls on the Central Bank of Ireland, An Garda Síochána and the Office of the Director of Corporate Enforcement to co-operate, with a view to establishing if individuals as well as corporate entities can be held accountable for their part in this scandal. I will support any victim or any representative who goes to the local Garda station and reports what I believe is this crime. I urge people who feel they have been robbed to do exactly that. It is their right in the same way it is when a person is mugged walking down the street - theft is theft.

The bigger picture here is that our white collar crime laws are clearly not deterring white collar criminals. We need to make our laws on corruption and stealing with a pen tougher. Yesterday a white collar criminal was sent to jail but he is the exception that proves the rule. If one positive can come out of this scandal it should be that the House gets serious about giving the Judiciary, the Garda and the Director of Corporate Enforcement the tools to tackle white collar crime.

I hope all sides of the House can support the motion. Up to 15,000 families deserve our support. They have done absolutely nothing wrong but have suffered at the hands of the banks. This is a scandal that has cost a section of the Irish people hundreds of millions of euro. It has unfortunately had a devastating impact on those families beyond the financial impact. We owe it to those families to stand with them tonight and send a message to the banks that we will accept nothing short of full redress and fair compensation.

Deputy Brian Stanley

I welcome the opportunity to speak to this important motion. The wrongful removal of tracker mortgage rates from mortgage holders is yet another scandal in a long list of scandals from within Ireland's financial sector. Families and individuals who were entitled to lower mortgage repayment rates were deliberately misled and exploited by these institutions, which were losing money due to their own incompetence. The scandal only came to light through the initiative of people who were being exploited and took their cases to the Financial Services Ombudsman. There are many who have already been forced from their homes or were coerced into surrendering their homes due to the exorbitant rates unfairly imposed on them. The actions of the banks that engaged in this deception are deplorable and will rightly be condemned by all sides of the House tonight. This scandal has taught us yet again that empty platitudes of condemnation and concern for victims is not enough to tackle the problem of white collar misconduct.

It is particularly galling to see that some of the banks that were bailed out by the State, at great financial and social cost, have caused further hardship to people who saved them from collapse. To say that these institutions behaved unprofessionally is to put it mildly. Poor judgment and reckless management practices within the financial sector cost this State and its people €64 billion, with a large part of that debt being passed on to our children and grandchildren. The response of the banks has been to force some mortgage holders to pay for the costs of their incompetence.

As well as the scandal of the bailout and denying people their rightful mortgage rates on tracker mortgages, we cannot forget those who to this day live under constant threat and harassment from financial institutions that seek mortgage repayments for overpriced homes. My county of Laois has seen some of the highest rates of mortgage arrears in the country according to the Central Bank, with 16% of mortgages in arrears of three months or more and many people still trapped in negative equity. The figure for County Kildare is also high, with one in eight mortgages in arrears of more than 90 days. I say directly to the Minister of Finance that the response from the Government has been minuscule. The mortgage-to-rent scheme and the other schemes are not working. People are trapped in these situations. Many of them are willing and eager to arrange fair and affordable repayment plans but they do not have the same power or leverage as the financial institutions. The vulture funds who buy the loans have power. We have seen the power they have in recent times.

This whole saga only goes to prove that the captains of private capital are incapable of acting fairly or ethically. It underlines the need for a State banking sector that operates ethically, plans for the long-term future and works for the benefit of the people not just the captains of finance. There is nothing revolutionary about this. We talk about how much we like Germany. Many countries have successful state and public banking systems like the Sparkassen model in Germany, yet Ireland remains committed to the private-only model which has produced a litany of failures and scandals. We need a comprehensive redress scheme. It is the least the victims of this latest scandal deserve. However, if we are to avoid similar scandals in the future, a major overhaul of existing laws is required.

If the Government wants to claim it is acting in the interests of the people rather than the interests of the bankers, the Minister is obligated to act on the recommendations of the motion. I cannot see how anybody can argue with it. It is the fair and right thing to do.

Deputy Donnchadh Ó Laoghaire

Cuirim fáilte roimh an rún seo atá os comhair an Tí. Tréaslaím leis an Teachta Ó Dochartaigh as ucht é a thabhairt os ár gcomhair. The purposed of the motion is to ensure the Government recognises a wrong has been inflicted on blameless citizens. Few will disagree with this. It must not only recognise that, it must rectify the wrong. As the previous speakers said, it appears that 15,000 customers, perhaps many more, have been affected by practices that were found to be improper and wrong by the Financial Services Ombudsman. Among the 15,000 customers affected, there are many families all over Ireland. There is a very high number of people in mortgage distress in my constituency in Cork. These families were kept on variable rate mortgages when they were entitled to extend or move on to a tracker rate. They were robbed of the opportunity to benefit from the tracker mortgages with quite significant amounts missed out on. They were deliberately denied lower rates. I speak for many who acknowledge that these sums would have been better in the pockets of families rather than bankers who, for far too long, have been unaccountable when it comes to questionable practices.

The banks have admitted that people have lost their homes as a result of decisions they made on this issue - 14 on the part of AIB, 15 in the case of Ulster Bank and 22 with Permanent TSB. That is a complete and utter scandal. Behind each of these numbers, there is likely a family who broke their hearts trying to hold on to their home. The fact that families have faced repossessions and countless others have lost their homes as a result of these practices, having decided on a voluntary sale after significant stress and hardship when they might have been able to sustain the mortgages in other circumstances, is more evidence that light-touch regulation has failed us. They are deserving of compensation in a timely fashion. I reiterate the calls for strict deadlines to be imposed for the redress and compensation to be paid. Compensation is not adequate. It cannot compensate for the upset, hardship and stress involved. We can only speculate about how many people went without a visit to their doctor or dentist or left bills unpaid or how many children were deprived of other necessities, educational opportunities or the chance to better themselves because their parents could not afford it as a result of the rate they were denied.

There is no question but that these practices have a real human cost and a wider social cost. This will be always framed as an error or oversight by some. The Irish banks seem to have actively worked to deprive people of their rights and entitlements.

If that is the case, it makes it a crime. Therefore, while compensation may not be adequate, it is the very least that can be done for these families and individuals.

There is also the issue of justice as regards those who were at fault. There is no doubt in my mind that there is a difference in attitude among officialdom in Ireland to white collar crime as opposed to other kinds of crime. Níl dearcadh chomh dáiríre ann i dtaobh an saghas coiriúlachta seo, agus is coiriúlacht atá ann. The cost inflicted here shows it is not a victimless crime. The motion calls on the Central Bank, An Garda Síochána and the Office of the Director of Corporate Enforcement to co-operate with a view to establishing if individuals as well as corporate entities can be held accountable for their part in this scandal.

I do not think it is unfair to state the reaction of the Central Bank has, at the very least, been relaxed in dealing with the issue at hand. It has been slow to administer any sort of deterrent that might prevent similar scandals arising again. Arís tá faillí ar an mBanc Ceannais i dtaobh cosaint a dhéanamh ar ghnáthsaoránaigh. White collar crime legislation in Ireland remains as inadequate as when Matthew Elderfield said back in 2013 that the legislation on the Irish Statute Book was inadequate. The State must step up to the mark in protecting the victims and ensuring justice in this area also. That means stepping up in terms of legislation but it also means stepping up in terms of resources. The Office of the Director of Corporate Enforcement and the Garda National Economic Crime Bureau - formerly, the fraud squad - including all the units thereof, need to be better resourced. People are tired of seeing those involved in white collar crime, whether in banks or other forms of finance, get away with it. It is still one of the festering sores of the economic crisis and something that, at every door in the country, frustrates people beyond fury to this day. We need to ensure this does not happen again and this must be done by way of legislation, by way of resources and by way of a change in culture and attitude. That can begin through compensation and through ensuring those responsible for these actions are brought to account.

Minister for Finance (Deputy Michael Noonan)

I move amendment No. 2:

To delete all words after “Dáil Éireann” and substitute the following:

notes that:

- the Central Bank of Ireland has a considerable range of supervisory, investigative and enforcement powers which have been enhanced in recent years across a wide range of areas to combat and punish wrongdoing;

- in October 2015, the Central Bank of Ireland embarked on a broader examination of tracker mortgage related issues and since then it has produced regular progress updates on the status of the examination;

- the wrongful removal of tracker mortgage rates from mortgage holders, or a failure to restore mortgage holders to tracker mortgage rates they were entitled to, has affected thousands of families;

- approximately 8,200 impacted accounts have been identified to date by the Central Bank of Ireland but that the total number of impacted accounts is likely to be higher;

- the responsibility for causing the problem, and therefore for rectifying the problem, rests in the first instance with the lenders which wrongly removed the right of their customers to a tracker mortgage rate; and

- the Central Bank of Ireland, utilising its powers, has already issued a reprimand and imposed a fine of €4.5 million on one mortgage lender, and also required the lender to provide redress and compensation to impacted customers, in respect of breaches of its obligations to tracker mortgage customers;

supports the Central Bank of Ireland’s actions to initiate an industry wide examination and calls for the examination to be completed, with appropriate redress and compensation to impacted customers, as soon as possible;

recognising its independence, calls for the Central Bank of Ireland to investigate, and where pertinent, to apply appropriate sanctions to regulated entities and/or individuals for wrongdoing where supported by the evidence;

calls on the Central Bank of Ireland, An Garda Síochána and the Office of the Director of Corporate Enforcement to co-operate and act as necessary on matters arising from the examination of the tracker mortgage issue; and

calls on the Government to keep the legislation on financial regulation and white collar crime under review and to bring forward new proposals if necessary.

I thank Deputy Pearse Doherty for raising this very important issue. I also thank Deputy Michael McGrath for his amendment to the motion tabled by Deputy Pearse Doherty. The fair treatment of consumer borrowers is a key requirement of the financial services regulatory framework and of the Central Bank consumer protection code. This requires all residential mortgage lenders to act honestly and fairly in the best interests of their customers and not to mislead customers, either negligently or deliberately, about the products they provide. It also requires lenders to make a full disclosure of all relevant information to a consumer in a way which seeks to inform the consumer and to enable a consumer to make an informed decision before entering into, or changing, a loan or other financial services agreement.

As all Deputies in this House will be aware, these minimum standards have not been met in the case of a significant number of tracker mortgage customers. This was wrong and it is a very serious matter which now needs to be put right by lenders. The Government, therefore, very much agrees with the sentiment of the motion tabled by Deputy Pearse Doherty and the amended motion tabled by Deputy Michael McGrath. While the Government will move its own amendment to the motion, it does not dissent from the broad thrust and objective of either Sinn Féin’s motion or Fianna Fáil's amended motion. However, the Government's motion wishes to focus more directly on what it considers should be the primary tracker mortgage issues at this point. First, it wishes to state it is the lenders who caused this harm to impacted tracker mortgage borrowers in the first instance by their incorrect actions who have the primary responsibility for rectifying the problem. Second, it wishes to state the Central Bank industry-wide examination should be completed, with appropriate redress and compensation to impacted customers, as soon as possible.

Since 2010 the Central Bank has been dealing with mortgage lenders on tracker mortgage-related issues. The bank had identified and pursued issues in regard to transparency with specific lenders regarding their borrowers who opted to switch from a tracker rate or who had a right to revert to a tracker rate after the end of a period where their mortgage rate was fixed. Individual cases were also presenting to the Financial Services Ombudsman and that office was making a determination on these cases, some of which were also coming before the courts. In addition, due in part to these developments, the matter was coming to greater public attention more generally.

Having regard to such developments, the Central Bank issued a public statement in October 2015 which indicated that it had commenced a systems-wide examination of tracker mortgage-related issues which covered, among other things, transparency of communications with and contractual rights of tracker mortgage borrowers. This examination has turned out to be the largest review ever carried out by the Central Bank on its consumer protection side. It covers 15 mortgage lenders which may at any time have sold a tracker mortgage product to a consumer borrower. It covers banks and other regulated lenders and includes lenders which are no longer providing new mortgage credit. It also covers mortgages which have been redeemed or whose tracker mortgage has been transferred to another creditor.

The examination requires all lenders to examine the extent to which they have been meeting their contractual obligations to their tracker mortgage customers or their compliance with their obligations under the Central Bank’s consumer protection code and other consumer protection regulatory requirements. Under the initial phase of the industry-wide examination, the Central Bank required lenders to put in place governance structures and systems to conduct a comprehensive examination. Lenders were required to appoint external third party assurers to oversee the examination in line with the bank’s requirements for the conduct of the examination.

The second phase of the examination is currently ongoing and it involves an extensive internal review of mortgage books to identify borrowers which fall within scope. This involves a potential review of a very large number of mortgage accounts to identify the individual accounts which will warrant more detailed consideration and review. The Central Bank examination requires that when groups of impacted accounts are identified, the lender must, in the first instance, stop charging the incorrect rate of interest on the customer's account and then communicate this to the customer in order that any further customer detriment is stopped as early as possible. Once a full review of the customer's account is complete, following external independent third party assurance, the lender will then issue a letter to the customer explaining the nature of the error, the correct rate to apply to the customer's account and information on the next steps in the tracker examination, including the redress and compensation process. The process also requires that lenders establish an independent appeals process to deal with customers who are dissatisfied with any aspect of the redress package they receive from lenders in respect of these matters.

As Deputies will be aware, last month the Central Bank issued an update statement which indicated that, so far, lenders had identified approximately 8,200 accounts where a right to, or the option of, a tracker rate of interest and-or the correct tracker rate of interest was not provided to customers in accordance with lenders' contractual or regulatory requirements. This is the number of impacted accounts within the scope of the examination which have been verified to date. However, in his subsequent appearance before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach on 20 December, the Governor of the Central Bank indicated that the bank expects to see lenders engaging with more impacted customers over the coming months.

There was considerable discussion at the committee meeting on the possible maximum number of likely impacted cases. At that meeting, the Governor did not dissent from an overall figure of 15,000 as being a reasonable estimate but, nevertheless, he did enter a caveat that it may not be that high. As I indicated in my responses to the Deputies' Priority Questions on this subject last week, I do not have any further information at this time on the likely maximum number of impacted cases. While both motions as tabled by the Deputies opposite make reference to the number of confirmed cases as 11,700, the Government’s amendment proposes to refer to the number of impacted cases which so far have been verified in a definitive way by the Central Bank, that is, the 8,200 cases as set out in the Central Bank update statement of 19 December. However, it also recognises that the final number of impacted accounts is likely to be higher, without specifying at this point what that final figure is likely to be.

This is done not to dispute what the final number of accounts will be - that will be determined in due course following the conclusion of the examination - but only to align the record of the Dáil at this point with the number of verified impacted accounts as currently stated by the Central Bank.

It should be noted that progress is already being made. On 29 November last, the Central Bank of Ireland announced that it had issued a reprimand and imposed a fine of €4.5 million on Springboard Mortgages Limited for serious failings in its obligations to its tracker mortgage customers.

The Opposition motion also refer to the possible need for more legislation to hold entities and individuals to account. The existing powers of the Central Bank are strong and should be used to punish wrongdoing where supported by the evidence. Of course, the Government will monitor the progress and outcome of this important investigation carefully, and if there is tangible evidence of gaps in legislation that need to be filled, the Government is prepared to bring forward the necessary legislation to strengthen the consumer protection function of the Central Bank.

What is clear is that some tracker mortgage customers have been treated disgracefully by mortgage lenders and that many borrowers have incurred considerable loss, in particular where they have either directly or indirectly lost their homes due to this harmful action by lenders. I assure the House that the Government is fully aware of the seriousness of this matter and it wishes to have adequate redress and compensation provided to impacted consumers as quickly as possible. At this point the Government wishes to support and encourage the Central Bank to complete its tracker mortgage examination investigation as quickly as possible.

I again thank Deputies Pearse Doherty and Michael McGrath for their very committed and serious contributions to this debate.

Deputy Michael McGrath

I commend Deputy Pearse Doherty and his colleagues in Sinn Féin for putting this issue forward and securing Dáil time to discuss what is a very important issue.

It must be borne in mind that of all the customers we know of who were wrongly denied tracker mortgage rates, the vast majority are still, in January 2017, not being charged the correct rate. The tracker rate to which they are contractually entitled has still not been reinstated by their banks under the supervision of the Central Bank, and that is a scandal and a disgrace. There seems to be no urgency whatsoever in the Central Bank's handling of this issue and this investigation. Let us put it in real terms. A family with a mortgage of €200,000 which is wrongly paying a variable rate of around 4% and should be paying a tracker rate of 1% is paying about €500 every single month in interest more than it should be paying. That is the reality of what we are talking about. Many of these customers have been paying this every single month, every year, for many years. This is an enormous issue in the household budgets of many thousands of houses across Ireland tonight.

I made the point about the lack of urgency. I will highlight one sentence for the Minister. The Central Bank stated in an update issued on 19 December, "[B]ased on current progress we expect that relevant lenders will have identified and commenced engagement with impacted customers by mid-2017 with payment of redress and compensation, processing and consideration of any appeals and the Central Bank's own assurance work continuing beyond this point for some lenders." Therefore, it could be many months yet before customers who we know are affected in this regard and have been wrongly denied tracker mortgage rates are actually given those rates for their own mortgages. That is the position as of tonight. Correspondence that Bank of Ireland brought before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach stated that the bank had completed the second phase of the four-phase Central Bank of Ireland tracker mortgage examination, that this phase was submitted on schedule at the end of September 2016 and that no timelines had been provided to complete the third and fourth phases. No timelines have been provided by the Central Bank to the banks in respect of the aspect of this investigation that really matters to people, namely, the reinstatement for them of the rates to which they are entitled. That is the nub of this issue.

There is a much deeper and wider issue regarding how this all happened, what exactly was known within the institutions and the nature of the redress that will be provided. However, the priority must be to ensure that those who are contractually entitled to a tracker mortgage rate are put on that rate without any further delay. If the Minister does anything, will he at least intervene and talk to the Central Bank about this issue and let it have direct contact with the individual lenders to ensure that this happens without any further delay?

The Minister spoke about the figures of 8,200 and 11,700. We were in a position to reconcile these figures over the course of the hearing we had with the Governor, Professor Lane, just before Christmas. The figure of 8,200 is the number of verified customers affected under the existing probe. However, we know there were almost 1,400 affected customers of Permanent TSB when it put up its hands and eventually, after many years of procrastination, dealt with this issue by way at least of acknowledgement in 2015, even though it has not been fully dealt with in the cases of individual mortgage holders. They are not included in the 8,200 but they are verified and confirmed. Equally, in 2010, Bank of Ireland, following a review, identified 2,100 customers who were wrongly denied tracker mortgage rates after having come off fixed rates. This is confirmed, verified and signed off on. While this is not part of the investigation, it is part of the issue at hand, namely, customers being wrongly denied tracker mortgage rates. One arrives at the figure of 11,700 by adding these up - the 8,200, the near 1,400 in respect of Permanent TSB and the 2,100 in respect of Bank of Ireland, a figure which dates back to 2010. When Deputy Pearse Doherty asked Professor Lane at the meeting on 20 December whether in the region of 15,000 customers could be affected, he did not dissent; in fact, he acknowledged this could be the case. However, the current figures are those we have outlined. We know there are 11,700. However, we do not have confirmation that many of the 15 lenders, to which the Central Bank wrote as part of the probe have completed the first and second phases, have done trawls of their mortgage accounts and have been in a position to confirm the number of affected customers. We do not know this as of now.

The Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach has done some very good work on this issue. In November and December, we brought in the main lenders - AIB, Bank of Ireland, Permanent TSB and Ulster Bank - and were in a position to go through this and other issues with them. We followed up on this with a meeting with the Governor before Christmas. We will continue in this regard. This body of work is far from complete. We have made the decision as a committee, under the chairmanship of Deputy John McGuinness, that the Central Bank should come before us on a quarterly basis until we are satisfied that this issue has been dealt with. I understand the next meeting with the Governor will happen in the very early days of April of this year, which I welcome because the engagement we had before Christmas was not satisfactory. To be fair, I think the Governor and his officials did not believe the tracker issue would dominate the meeting, but it did dominate the meeting because of the information we had gleaned from our engagement with the other banks. The Governor and his staff will be very clear before they come before the committee on the next occasion that the focus of our engagement will be on the tracker mortgage rate issue.

There is a wider issue about the statutory role of the Central Bank in consumer protection. I have made this point on many occasions. The Central Bank is not adequately fulfilling its consumer protection role. Perhaps the reason for this is that after the financial crash, the immediate focus in strengthening and reforming our regulatory system was to ensure prudential supervision was beefed up in terms of resources and, for example, a more intrusive style of supervision. I would like to think this is happening. However, my observation is that the Central Bank is not playing Champions League football when it comes to consumer protection and protecting the statutory rights of the consumers of financial services products in Ireland today. In many respects, the Central Bank is really in the spotlight on this issue.

I acknowledge that it levied a very significant fine on Springboard mortgages in respect of the 1,372 customers affected by the Permanent TSB - Springboard issue. It remains to be seen what it does about the possible enforcement proceedings that may follow this investigation. It has to have the space to do its work but we will put pressure on it to conclude that work at least from the consumer perspective as quickly as possible.

There are other issues that are relevant to this including the fact that many customers who should be on a tracker rate tonight are not. That has to be dealt with. There are other customers on the wrong rate. Bank of Ireland has acknowledged a significant number of its customers are on the wrong rate and presumably it is taking steps to correct this. The customers AIB has identified as affected by this issue are being put on a tracker rate of 3.67%. That makes no sense because with others I have examined the contractual position in the mortgage contract it is very clear that at the end of the fixed rate period the customer may choose between a further fixed interest rate period, conversion to a variable interest rate or conversion to a tracker interest rate mortgage loan at the bank's then prevailing rates appropriate to the mortgage loan. In a further clause it clarifies the nature of a tracker rate saying it is made up of two parts: the ECB's main refinancing operations minimum bid rate, the ECB rate, which is variable and the tracker margin as stated in part one of the particulars of mortgage loan "subject to paragraph 3.6.3 below". In other words, the only variable element of a tracker mortgage rate is the ECB based rate. It is ridiculous to suggest customers who the bank recognises should be on a tracker rate are going to be on the ECB rate, plus 3.67%. At no time when tracker mortgages were being sold from the late 1990s up to around 2008 were people put on an ECB base rate, plus 3.67%, yet when we put this to the Central Bank it seemed to be standing over that practice. I do not believe that is accurate. If that is how this issue is to be handled it might as well go to the courts where the interpretation of those contractual rights will ultimately be determined. That should not be the case. There are groups of mortgage holders who are being represented by solicitors and if they have to vindicate their rights through legal recourse that is exactly what they will do but they should not have to do that because it is clear what the mortgage contract, to which they and their financial institution is party, says. I gave the example of AIB. Deputy Pearse Doherty gave the example of Permanent TSB where I think the rate is 3.25%, at least in some cases.

Fundamentally, the probe here by the Central Bank has to get to the bottom of how this happened in the first place. In Priority Questions last week the Minister used the phrase that it stretched the boundary of coincidence that all the main lenders happened to make the same mistake and they made it in the manner that was adverse and not favourable to the customer. Perhaps that was a coincidence. Why was this practice widespread and systemic? The Sinn Féin motion uses the word "co-ordinated". I do not know if it was co-ordinated among the institutions. I do not have any evidence of that but they did all happen to make the same mistake. I want the Central Bank to go into each of those institutions to read the minutes of the executive management committee meetings and the board meetings, internal memoranda, the e-mails that went back and forth between the senior executives who were involved in this and see how they reacted when they became aware of it. They did not become aware of it today or yesterday. They became aware of it several years ago. We know in the case of Permanent TSB there was a concerted effort, through the work of the Financial Services Ombudsman and the court process to the very steps of the Supreme Court, to deny the blindingly obvious, that customers entitled to a tracker rate would not get that rate. The Central Bank probe has to be that forensic. It has to go in and find out exactly what happened. When the institutions first became aware of this how did they deal with it? Was a deliberate and conscious decision made to try to ride this out or was it a genuine mistake? Was it a systems error? I do not know but sometimes I despair. Having come through what we came through in the financial crisis of 2008 and having sat through the banking inquiry for almost two years, examining in detail the years leading up to the crisis, when the crisis originated, I wonder seeing this if the period overlaps. Have we learned anything? Have the regulatory authorities learned anything in respect of their approach?

We have not named the Director of Corporate Enforcement and An Garda Síochána directly in our amendment to the motion because the Central Bank has to do its work and that has to be led by the evidence. If the evidence points to criminal wrongdoing the Central Bank has no option but to refer it to the Garda. If there is any evidence whatsoever of a contravention of the Companies Acts it has to refer it to the Director of Corporate Enforcement. I do not need to spell that out in our amendment, but it is relevant. A review of our legislation on white collar crime and deterrents is well overdue. It does not have to be directly connected to the Central Bank investigation but it is warranted. When one considers the proceedings taken against individuals concerned, the length of time it has taken for cases to come to the courts one has to question its efficiency and effectiveness. The Government should institute an independent review of our law in that area as quickly as possible.

The priority is to ensure those affected will receive restitution as quickly as possible and that the Central Bank moves through the various stages of its process to ensure customers will be treated fairly. We will do our job as elected representatives through the work of the Oireachtas Joint Committee on Finance to maintain the public and Oireachtas spotlight on this issue.

I do not know how the voting on the Sinn Féin motion, our amendment and the Government's amendment will work out but it would be good if the Oireachtas could speak in some degree of unison on this issue and some agreement could be reached so that a motion does pass in respect of it because there are strengths and weaknesses in the motion and amendments.

What happened is a disgrace. With each passing day we hear individual stories of how it has affected people. Even the Central Bank acknowledges that perhaps up to 100 families have lost their homes directly as a result of this. Can the Minister, any Deputy who has not gone through that trauma or I really understand its nature, what it does to a family, the devastation involved? We cannot and how can people who have lost their homes be compensated, apart from providing them with another home that meets their needs? For people who lost their homes that is exactly what needs to be done. The banks have a duty to ensure they have a home and that it is one they can afford because there will be some job of work to be done here to go back over each of these mortgage accounts to see exactly the level of compensation, the reimbursement of money taken from people, compensation for that loss and added compensation if they lost their homes.

I advise people to trawl through their houses, find their mortgage contracts and have a good look at the documents. I refer, in particular, to people who started off on a tracker rate and were placed on a fixed rate in 2006, 2007 or 2008 when the ECB base rate was climbing. Many fixed at that stage, for fear that their tracker rate would get out of control, only to be put straight back onto a variable rate at the end of the fixed rate period. They might not be aware that they were entitled to a tracker rate. People who think they might be affected by these issues should find their mortgage contracts, read and check them again and obtain independent financial advice.

Can we have any confidence in the trawl being done by the individual institutions? Can we be confident that the supervision of the Central Bank will unearth all of the individual cases that have been affected? The answer is no, we cannot. We thought, for example, that Bank of Ireland had disposed of this issue in 2010 when it found that tracker rates had been wrongly denied to 2,100 customers. We found out in the course of the investigation that Bank of Ireland had not got to the bottom of the matter, as 602 other customers had been denied tracker rates and an even larger number of customers - 3,916 - had been put on the wrong rate. These cases were not picked up in the original probe. If the Central Bank had not undertaken its subsequent probe, would these customers ever have been identified? My advice to customers is to take nothing at face value. They cannot trust that the investigations the banks are undertaking will identify their cases. They cannot trust that the supervision of the Central Bank will deliver justice for them. They will have to fight for justice themselves. That is exactly what customers will do. From our perspective in Fianna Fáil, we will work collaboratively with others in this House and at the Oireachtas committee to ensure those affected will get the justice they deserve.

Deputy Richard Boyd Barrett

I would like to share time with Deputy Mick Barry.

An Leas-Cheann Comhairle

Is that agreed? Agreed.

Deputy Richard Boyd Barrett

I commend Deputy Pearse Doherty and his Sinn Féin colleagues for tabling the motion. As previous speakers said, it is scandalous that significant numbers of families lost their homes because of the practice of multiple banks to fail to give them the tracker rates to which they were entitled. It is shocking that the banks moved against these families on the basis of their inability to pay mortgage rates they should not have had to pay. As we have heard, immeasurable anxiety and hardship were needlessly suffered by over 11,000 families, perhaps up to 15,000, in these circumstances.

The measures being proposed in the motion are absolutely correct and I support them fully. People need compensation and redress. The investigation has to be concluded and the banks that acted in this manner need to be held to account. We need to get to the bottom of how all of this happened in the first place and ensure it will not happen again. There must be severe penalties for financial institutions that can impose this needless suffering.

As I said, I agree completely with the motion. I do not have the same expertise on this issue as Deputies Pearse Doherty and Michael McGrath who have been following it at committee level, but I cannot help having an enormous sense of frustration that all of this has been done by the financial institutions we bailed out. This is one of multiple wrongs these banks have done to mortgage holders and the more general population as a result of what happened in 2008, which resulted from their greed for profit. It is difficult not to conclude that the immoral greed for profit of these institutions which propelled the entire economy over the cliff almost a decade ago is also the reason this specific issue has arisen. Even now, eight years on, up to 15,000 families are suffering needlessly.

The Central Bank has still not got to the bottom of the matter and the Government is standing idly by. It is allowing the issue to drag on, while the suffering continues. I cannot help feeling extraordinary frustration about the Government's failure to act as we suggested when the crash hit. Many mortgage holders are still in mortgage arrears and being threatened with repossession as a result of the Government's refusal to nationalise the banks we bailed out. Rather than taking control of the banks we bailed out which are continuing to inflict this suffering, the Minister is standing back and saying it is the responsibility of the Central Bank to act and that he can do nothing about the commercial activities of the banks.

I agree 100% with the motion. Frankly, everything that has happened in this case and more generally makes clear the need to fundamentally change the banking model and take banks into proper public ownership.

Deputy Mick Barry

This is corporate theft and the bosses who masterminded this crime should be made to do the time. We are talking about bank customers who were denied their right to tracker mortgages or the option to have such mortgages and about cases in which the correct tracker mortgage rate of interest was not applied. The Governor of the Central Bank, Mr. Philip Lane, reckons that as many as 15,000 householders have been cheated out of money. It would cost hundreds of millions of euro to repay those who have been cheated in this way. According to some estimates, it would cost €1 billion or even more, but what has been the human cost? People who lost their homes have suffered anxiety and depression. Have there been suicides as a result? What has been the scale of the toll of human misery?

I remind those who believe this was accidental that it happened across the board in all of the banks. That clearly points towards it being systematic organised robbery of thousands of ordinary people. Decisions would have had to have been made by individuals in positions of influence and power. We are talking about crime. Just because it is white collar crime does not mean that it is any less criminal. If one does the crime, one should do the time. To be quite blunt, more than a few jail cells should be cleared out in Mountjoy Prison for the boys who dreamed this one up. Yesterday a former executive of Anglo Irish Bank, Mr. Willie McAteer, was found guilty of an €8 million fraudulent loan arrangement. He will not spend one extra day in prison as a result of the verdict because the sentence will run concurrently with another he is serving. That is wrong and I do not think it should be the template for what happens in this instance.

I will not have time to make all of the other points I intended to make. The tracker mortgage financial product was an attempt to squeeze the last bit of air out of the last credit bubble. A new credit bubble is being pumped up. Although the banks are owned by the State, they are still pursuing a capitalist model of banking. AIB and Permanent TSB are being lined up for privatisation, but we need a different model of banking in this country. The banks should be run as public utilities. They should offer low interest loans to customers and should fund them from customer deposits. They should offer reasonable and low interest rates that would not depend on the boom and bust cycle of the capitalist financial markets.

That is the model we should pursue rather than the current model. It is a for-profit banking arrangement that has allowed this scandal and corporate theft to take place.

Deputy Thomas Pringle

I fully support tonight's motion and I commend Sinn Féin for bringing it forward. It is really hard to believe, eight years since the financial crash, that this kind of carry-on is still evident within our banks. It is also hard to fathom that only the work of individuals who looked at their own contracts and fought this brought the issue to light by bringing the banks to court to vindicate their rights. We can consider that at least 15,000 mortgage holders and families are affected by this and the banks have admitted to 41 cases where families have lost their homes because of the actions of banks. Up to 100 families may have lost their homes because of these actions. It is disgraceful.

Anybody on this side of the House who considers this reasonably must conclude that this was a co-operative action on behalf of the banks. It is too much of a coincidence that all the banks suddenly arrived together at a decision that they could do this and attempt to get away with it. Nobody would have seen a group of businesses stumble across the same idea and put it into action independently. We have seen cartels operating in other forms of business across the country and there is no doubt in my mind that a cartel operated among banks as well with the goal of defrauding their customers and citizens who bailed out those same banks. We have loaded debt on our society to keep those banks going.

This issue must be investigated fully and the Central Bank must be given every power to ensure executives within the banks pay for this and are held individually accountable. The institutions must also be held accountable for their actions. I find it very difficult to square the Government's amendment, which argues that the Central Bank of Ireland has a considerable range of supervisory, investigative and enforcement powers that have been enhanced in recent years across a wide range of areas to combat and punish wrongdoing with the evidence of the former financial regulator, Mr. Matthew Elderfield. He indicated to the Committee of Public Accounts that he did not believe current legislation in the Statute Book is strong enough to bring people to account for white collar crime.

This demonstrates what we seem to think of white collar crime in this country. We think it is grand, dandy and dead-on if one can get away with it. If a person gets caught, he or she can throw his or her hands up and give a few euro of compensation to the people it affects. Then he or she can trundle on a merry way, finding the next scheme to screw the customer base and get away with it again. That is what is wrong. The banks in this and probably every country are amoral institutions. They do not care about the individuals they deal with or the people and lives they destroy. All they care about is the pursuit of profit. Unfortunately and sadly, this and the previous Government have done nothing but ensure these institutions can continue without hindrance as we will foot the bill and pump in the money to allow them continue. This must stop now.

Deputy Michael Harty

The problem with banks is they seem to operate without reference to ethical standards. Too often they do not seem to appreciate the difference between right and wrong or good and bad behaviour. It does not seem to bother their conscience that overcharging on mortgages results in families either losing their homes or being subject to the most horrendous stress, both financial and emotional. The banks must be made to care and if it requires strong legislation to make them honest, so be it.

It was a few days before Christmas that the Central Bank disclosed that at least 8,200 home owners were denied a tracker mortgage by their lender and shortly afterwards, the Governor of the Central Bank, Mr. Philip Lane, conceded that the number of people affected by the tracker mortgage scandal could be as high as 15,000. It is unconscionable that banks wrongfully removed tracker mortgages from mortgage holders or failed to restore tracker mortgage rates to which they were entitled. It seems people mainly affected by this scandal are those who were either denied a right to or an option of a particular tracker interest rate, or the rate was not given in accordance with their contract.

The motion notes that in October 2013, the Central Bank head of financial regulation, Mr. Matthew Elderfield, stated that he did not believe that current legislation on the Statute Book is strong enough to bring people to account for white collar crime. If that is the case we must change our legislation. If we can bring a shoplifter to court and sometimes to jail, surely we must throw the book at organisations and individuals whose wrongful action has robbed families of their rightful tracker rate and sometimes of their homes. The Minister for Finance has stated that what happened was outrageous and the Fianna Fáil spokesman, Deputy Micheal McGrath, described it as scandalous. Both seem to agree that the buck stops with the Central Bank and Fianna Fáil has called on it to exercise its statutory powers fully to ensure this issue is comprehensively resolved. However, the question raised in 2013 by Mr. Elderfield as to whether Irish law is strong enough to tackle white collar crime is worth repeating. Perhaps the Central Bank could tell us if the legislation is sufficiently strong to deal effectively with crime in financial institutions. If there are sufficient powers, the Central Bank must pursue offenders in co-operation with gardaí and the Office of the Director of Corporate Enforcement. If legislation is insufficient, the Government and the Oireachtas must be informed and it would be up to us to give the bank the tools to do the job.

Deputy Eamon Ryan

On behalf of the Green Party I am very happy to support the motion presented by Sinn Féin. I commend the party for raising the issue and the work that has been done in the Oireachtas committee over the past year and a half or two years. A number of points have been raised by people who have been actively engaged with the matter and one of the first recalled is that the Central Bank has been particularly slow and did not respond with the urgency desired of a consumer protection agency. That is deeply disappointing after having gone through such a dramatic banking crash and after trying to put in place the necessary legislative means to help the Central Bank, which had failed in its core operation of looking after the financial health of our institutions. The new structuring of the Central Bank and how it breaks down affairs of the consumer, banks and other Central Bank roles is clearly not working. The Central Bank has real questions to answer as to why it has not been more proactive and why it was not quicker in responding to this evolving scandal. It is not like this has just emerged in the past few months or even the past year. Victims of this crime were raising the matter long before that but they were not heeded and their case was not heard with sufficient urgency.

I am raising information from colleagues or friends who have been involved in the process. Their message is that the problem is ongoing and it is not an historical legacy. There are still banks and institutions pursuing customers but not upholding protections that exist in contracts. They are using every legal trick and mechanism to get consumers out of tracker mortgages. This is still happening.

The wider concern I have to a certain extent is what this says about the Irish banking system. One would think after the scale and nature of the crash we experienced, there would be a system that would, more than anything else, try to restore trust. It should treat customers in a scrupulously fair manner. I do not wish to pick on any one institution but I am aware of AIB because I am a customer. It is a State-owned bank.

For the past 30 or 40 years, the bank has been involved in a series of scandals. We have seen the DIRT inquiry, the ICI scandal in the 1980s, the Rusnak scandal and the foreign exchange scandal in which €65 million was defrauded through the bank under improper foreign exchange regulations. All of these scandals occurred before the banking crash and the insane lack of security and attention to lending and risk management processes. For such a bank to be caught again is extraordinary.

We know 3,000 customers have been affected and some 14 households were forced to lose their homes on the back of the improper treatment of tracker mortgages. It is deeply disquieting that we do not seem to have learned the lessons or know about proper banking and the propriety needed to enable people to raise deposits and extend loans. This applies especially to mortgages, which have such a profound effect on the lives of people. It is deeply concerning that the lessons do not seem to have been learned. We should address this as well as the commendable actions set out in the motion. We should be looking to the core and the very nature of banking in our society.

The Green Party has been presenting a particular proposal on the concept of public banking. We will continue to do so in the Dáil, should we get the Private Members’ time. The concept is based on old-fashioned precepts based on strong contact between the bank manager and the customer. I gather a similar idea was included in the rural development plans yesterday. This should be an essential part of any development in this area. We need to start to develop new ethical professional banking systems.

At the core of this model is a close relationship between the bank manager and the customer. The lack of such relationships is one of the reasons things have broken down. We changed the nature of the banking system 30 or 40 years ago. The system went in the direction of target-based lending with various incentives if managers met or issued a certain number of loans. This put serious pressure on staff in banks, especially in the tracker mortgage area, and encouraged staff not to give customers the break and not to do the right thing. Instead, they became obsessed with the target-based measures of progress. This got the banks and so many of our other financial institutions into real trouble.

We need to direct the Central Bank to take far swifter and more rigorous action. We need to examine what white collar crime measures may be applied. However, we need to learn wider lessons about the nature of banking and lending. It is not only a question of the risk side. The responsibility side was clearly forgotten in this instance, to the cost of at least 15,000 households. This House is rightly standing up for those households.

An Leas-Cheann Comhairle

With your agreement, Deputy, you can share your time. You have two minutes left.

Deputy Eamon Ryan

I am happy to give it to Deputy Danny Healy-Rae, should he want it.

An Leas-Cheann Comhairle

Are there any conditions?

Deputy Eamon Ryan

No.

Deputy Danny Healy-Rae

There would be uproar if a bank was robbed. We have it the other way around now - the banks are robbing the people. There is frustration and anger at the fact that so many people lost their homes. The repercussions for families, children and parents have been significant. People have had to leave their homes. I know so many who have lost their homes. It is so sad to think that banks and financial institutions could do what they have done.

It is not a building that did this; it was the people within those institutions who inflicted this wrong on those affected. There should be some accountability from the managers or the people in charge who meted out this bad wrong to these unsuspecting people.

I was comforted to hear the Minister for Finance, Deputy Noonan, saying that there will be redress and a compensation package for the disenfranchised borrowers. I hope it does not take long because these people have suffered for long enough. The people who did this should be made accountable for their actions and behaviours. The examination by the Central Bank needs to be fast-tracked and we need to see a determined effort to finalise it as soon as possible.

I recall the anguish many felt some years ago when the banks squealed on the people with foreign accounts. The banks advised these people to take out these foreign based accounts. It was not the case that people in lonely hillside farms thought of putting money into these foreign addressed accounts; the banks advised them to do it. Then, the banks gave their names to the Revenue Commissioners and squealed on them. Many people suffered at the time because of the advice the banks gave to unsuspecting account holders. The people in these banks who meted out this wrong to so many families should be made to feel pain now because it is only right and fair. I thank Deputy Eamon Ryan for allowing me to share time.

Deputy Caoimhghín Ó Caoláin

Táim sásta an deis a fháil labhairt ar an ábhar tábhachtach seo agus molaim go mór mo chomhghleacaí, Pearse Doherty, as ucht an rún seo a chuir chun cinn.

The human impact of this mortgage scandal cannot be underestimated. The despicable deliberate actions of our banks have caused misery for approximately 15,000 mortgage holders and their families throughout the country. The crux of the scandal boils down to the fact that thousands of fixed-rate mortgage holders were deliberately kept in the dark by their banks in respect of their entitlement to move or move back to the cheaper tracker mortgage rate. This was all to the serious detriment of those who believed there was no escape from their prohibitively expensive fixed-rate mortgage and, of course, it worked to the advantage of the banks. The implications of this were significant, with thousands of families struggling to pay the higher rate and many dozens of families losing their homes due to the excessive mortgage loan repayment costs they faced.

Since the Financial Services Ombudsman investigated this matter and found in favour of the customers, bank after bank has admitted that it had not given trackers or the option of a tracker to hundreds and thousands of customers. Hearing banks claim that it was little more than a mistake would be comical were it not so serious. The evidence that exists proves that this was a calculated plan. This was a way for them to reap greater returns without a care about the human impact of their actions.

This all amounts to nothing other than theft. Those responsible must be held to account and a strict deadline must be imposed for the redress and compensation to be paid to those affected. It is not enough to now secure a return of the moneys taken illegally by the banks from these customers. Adding a paltry sum in compensation for what they have suffered does not cut it either. Greater contriteness and generosity is required on the part of the banks. The individuals who oversaw this policy, the bank employees who knowingly directed and implemented this policy in each of the bank entities involved, should face the full rigours of the law. They have not only been directly involved in theft on behalf of their employers but they have been complicit in the ruination of many lives. I speak not only of individual lives, including lives lost, but of the ruination of whole families and with a generational impact as well. Innocent and unsuspecting citizens must be protected.

The question asked by the motion is whether we want a republic that upholds and defends the interests of its citizens or one that has sold its soul to corporate interests and the banking elites.

Let us not forget those who are entrusted to oversee the policies and practices of the commercial banks and other lenders. The Central Bank of Ireland was at best dilatory in its address and investigation of this corporate criminality. The Central Bank is getting ready to move to its new shiny gold-coated premises on the quays. It strikes me looking at it when driving past that it looks like a Donald Trump outpost. The Central Bank of Ireland and its officeholders have apparently changed little from the years of its former Governor, who believed, or claimed he believed, that all was well with the Irish banking sector. I appeal to the Minister of State and to all Members of this House to accept and endorse the spirit of the motion before us. Le bhur dtoil, tugaigí bhur dtacaíocht don rún seo.

Deputy Carol Nolan

Tá mé an-shásta as ucht an deis labhartha anocht ar an ábhar fíor-thábhachtach seo atá ag cur isteach ar na mílte clainne ar fud na tíre. As we know, the scandal of the tracker mortgages affects up to 15,000 mortgage holders across the State. The pace in addressing this scandal has been painfully slow. It clearly shows that there is absolutely no urgency in terms of remedying this issue, which has caused great distress to too many families across the country.

The update on the examination of tracker mortgages in late December 2016 states the following: "Based on current progress we expect that relevant lenders will have identified and commenced engagement with impacted customers by mid-2017 with payment of redress and compensation, processing and consideration of any appeals... continuing beyond this point for some lenders." While lenders have dragged their feet on this issue and are clearly in the wrong, dozens of families have been forced out of their homes as a result of the extra costs they incurred on a more expensive mortgage. That is totally unacceptable. This Government has a duty to protect and defend all of its citizens. We should uphold the vision of the 1916 Proclamation of equality and fairness for all of our citizens.

This scandal only came to light due to the actions by various householders in taking their cases to the financial ombudsman. It would never have come to light otherwise. I commend them on their courage and determination. Now these families must wait for justice and that is totally wrong. It is not good enough and we in Sinn Féin will not accept it. We will not stand idly by when this happens. Clearly, there is a need to develop more appropriate and robust legislation to ensure that individuals in financial institutions can be held responsible before the law for their actions in financial matters.

This motion is an opportunity to send a very clear message to the victims of this scandal. As I said, there have been too many victims and it cannot be ignored. We must send a message that the Dáil is on the people's side and not on the side of the banks, which represents corporate greed and acts in an absolutely disgraceful manner. I call on all parties to support this motion.

Minister of State at the Department of Communications, Climate Action and Environment (Deputy Seán Kyne)

The tracker mortgage examination is a matter of great interest to the public and one the Government considers to be of the utmost seriousness. This debate has raised a number of important points and I thank all the Deputies involved for their contributions.

As has already been referenced by the Minister, Deputy Noonan, the Central Bank, as the independent regulator of financial services in Ireland, is currently undertaking an investigation into tracker mortgages. This industry-wide examination, which began in 2015, is ongoing and while all lenders are currently in the process of carrying out their internal reviews, it is important to note that some lenders may have their internal reviews completed sooner than others, depending on the size of their mortgage books and the complexities associated with them completing the examination. The purpose of the investigation is to identify cases where the contractual rights of borrowers under the terms of their mortgage contract were not honoured or where lenders did not fully comply with various consumer protection requirements and standards regarding disclosure and transparency of information for the customer.

In its most recent update on the matter, the Central Bank announced that it expects that all relevant lenders will have identified and engaged with all affected customers by mid-2017 with payment of redress and compensation, processing and consideration of any appeals and the Central Bank’s own assurance work continuing beyond this point for some lenders. This is certainly a matter of great significance to the Oireachtas and the wider public. The work of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform and the Taoiseach, in particular, should be acknowledged in giving the issue the attention it deserves. The focus now should be on completing the Central Bank examination as quickly as possible.

There has been some progress on this issue. In his earlier statement, the Minister referred to a €4.5 million fine imposed by the Central Bank on Springboard Mortgages Limited. Deputies may be interested to hear further details on this matter. The fine and reprimand issued by the Central Bank on Springboard Mortgages Limited was the culmination of the Central Bank enforcement investigation into that firm which found it had breached key requirements of the consumer protection codes 2006 and 2012. In addition, the Central Bank required Springboard to implement a major redress and compensation programme to customers impacted by the breaches in the amount of approximately €5.8 million to date.

The Central Bank’s investigation found that the company failed to apply the correct interest rates to 222 customer mortgage accounts over a seven-year period between August 2008 and July 2015. The length of time customers were required to make higher mortgage repayments than required ranged between 12 months and six years and 11 months. The average amount overcharged to a customer’s account was €19,351. Overcharged amounts ranged from approximately €100 to approximately €68,000. Having to make higher that required mortgage repayments, due to the failure of the company to apply the correct mortgage interest rate, caused serious difficulties for customers with some customers going into mortgage arrears and some being subjected to legal proceedings.

The key elements of the redress and compensation programme required by the Central Bank from Springboard included the restoration of impacted customer accounts to the correct tracker interest rate; the adjustment of the balance of impacted customer accounts to the position the accounts would have been in if the correct interest rates had always been applied; the refund of any overpayments to customers after their account balances have been adjusted; the provision of compensation payments to impacted customers to reflect the detriment suffered by them as a result of the breaches; the provision of additional payments to impacted customers to enable them to take professional advice in respect of the redress and compensation offered to them by the company; the establishment of an independent appeals process to ensure that impacted customers can challenge the redress and compensation offered to them in an expeditious and customer-friendly manner; and the provision of redress and compensation to impacted customers upfront, regardless of whether they appeal. Also, the company agreed not to invoke any statutory limitation period in respect of any complaint that impacted customers may choose to make to the financial services ombudsman and the courts for a certain amount of time.

Charging an incorrect higher interest rate was clearly a very detrimental activity on the part of Springboard and was totally unacceptable. The strong sanctions applied by the Central Bank, however, demonstrated that it has considerable powers to punish regulated firms for detriment they cause to their customers. The focus now should be, as previously indicated, on bringing the full Central Bank examination to a conclusion as quickly as possible.

It is important that we remember that both the cause of this problem and the primary responsibility for repairing the damage caused to consumers rests with the relevant lenders, which did not act in the best interests of their customers or which did not properly honour the mortgage contracts they entered into, and it is essential that these affected customers now receive acknowledgement for the harm they have suffered, with appropriate redress and compensation packages. This Government is committed to ensuring and assisting the Central Bank complete its independent examination as quickly as possible, to bringing this damaging episode for the financial services industry to a conclusion and, most importantly, to ensuring that impacted home owners and consumer borrowers are properly compensated and dealt with by their lenders.

An Leas-Cheann Comhairle

Glaoim ar an Teachta Pearse Doherty chun deireadh a chur leis an díospóireacht.

Deputy Pearse Doherty

Ar dtús báire, cuirim mo bhuíochas in iúl d'achan duine a labhair ar an ábhar seo anocht. Mar atá ráite ag go leor Teachtaí eile, is ábhar fíorthábhachtach é a chuireann isteach go mór ar chuid mhór dár saoránaigh. Gabhaim mo bhuíochas leis an Aire, an Teachta Noonan, na Teachtaí McGrath, Boyd Barrett, Barry, Pringle, Harte, Ryan, Healy-Rae, Ó Caoláin agus Nolan agus an tAire Stáit, an Teachta Kyne. In achan rud a luadh inniu sa díospóireacht, bhí sé iontach soiléir go bhfuil cáineadh láidir á dhéanamh ag Teachtaí Dála d'achan pháirtí agus ag Teachtaí Neamhspleácha ar an dóigh a láimhseáil na bainc an 15,000 duine atá thíos leis an méid a thit amach sna bainc le cúpla blian anuas. Tá difir ann maidir leis an dóigh chun dul chun tosaigh. Tá dhá leasú curtha síos: ceann an Rialtais agus ceann an Theachta McGrath. Mar a dúirt an Teachta McGrath, ba chóir don Dáil seo labhairt le glór amháin agus muid ag vótáil ar an rún seo ar an Déardaoin. D'iarr mé é seo ar an mbeirt Theachta agus dúirt an Teachta Noonan go raibh sé ag tabhairt tacú don spiorad agus croílár an rúin a chur mé féin síos ar son Shinn Féin agus an rud céanna maidir le leasú an Theachta McGrath. Sílim gur chóir dúinn díriú air sin; ní chóir scoilt a bheith ann. An fáth gur chuir mé síos an rún seo ar son Shinn Féin ná chun a rá go soiléir leosan atá thíos leis seo go bhfuilimid ar a dtaobh agus chun ráiteas soiléir a thabhairt do na bainc go bhfuilimid dáiríre nuair atáimid ag caint ar fheabhsú a dhéanamh ar an reachtaíocht atá againn chun a chinntiú nach dtarlóidh é seo amach anseo agus go rachaimid go dtí an pointe inar féidir le hachan duine a rá céard é an ráta ceart agus an méid airgid a bhaineadh díobh a thabhairt ar ais.

I welcome the contributions that have been made. There was a lot of common ground in all of them. Members have used the words that I have used myself on many occasions in saying that this situation is scandalous and outrageous. This is also some of the language we are hearing from the Minister for Finance, Deputy Noonan. There is no doubt that when we boil this down, many of us - and I include myself - have been inundated by individuals who have contacted us with regard to how this has personally affected them. I am sure there is not a Member in the House who has not had a constituent telling them what this has meant to them. I remember my first personal experience in uncovering this. I was dealing with individuals in their sitting room. They were worried they were about to lose the family home. They had just, for the first time ever, gone into arrears of €300. I explained to them that there was no way they were going to lose their family home over just €300 of arrears. I asked them to pull out the contract and within minutes it was very clear to me, it was in black and white, that after the period of fixed interest rate had expired they would go back on to the tracker rate. I asked them what tracker rate they were on and they explained they were on a standard variable rate. I told them it was in black and white that they were entitled to a tracker rate after the variable rate period. They took a case to the Ombudsman but at that time there were other cases with the Ombudsman and a lengthy delay. This was because the banks, in particular the Permanent TSB, a State owned bank, fought these individuals all the way. When the Ombudsman came down on customers' side the State owned bank said "No" and that the bank was going to take the Financial Services Ombudsman - the customers' representative - to the High Court.

Years went by, people were overcharged and had to make sacrifices and some of it was very personal. It affected people very much. I recall a conversation with one individual who had just come off the phone with her bank. The mother was left in tears. The child, who had not reached its sixth birthday, came up with a piggy bank and gave it to the mother saying "That is for the bank". The mother felt terrible because she felt that she had failed to insulate her child, who should not be thinking about these things, from this issue that had taken over the child's family for the last number of years. She should not have been made to feel like a failure but the phone calls were to plead with the banks to restore the family back onto the rate they were entitled to. There were different sacrifices, things that can never be compensated for, such as missing out on family activities, taking the children on holidays or, if the child is in transition year, the school trips where these families might be the only ones whose children could not go. There are many families who cannot do that anyway, but these particular families could have done so only for the fact that the bank was overcharging them in the region of €500 or up to €1,000 per month.

There were also cases of families that were broken up. It was not that the marriage broke up, but because the bank was overcharging them one of the adult family members had to leave the State and find a job elsewhere. That will never be compensated for. How does one compensate for children growing up for those years without their father there every day? It can never be compensated for but that is what the banks have done in this regard.

The more I got into the situation the more astonished I became that this seemed to just brush past. There was no outrage in regard to how this happened. I make the point again that if the banks had got away with this it would have been €1 billion they had taken wrongfully from 15,000 individuals. It is the biggest swindle the State has ever seen.

The Minister spoke about the Central Bank. The Sinn Féin motion states that the Central Bank's industry-wide review in late 2015 was belated. Let us be clear. The review was a result of a letter that was sent by the CEO of the Irish Mortgage Holders Organisation on 26 October 2015, just one month previously, that called on the Central Bank to have an industry-wide review. At that point the Permanent TSB acknowledged that it had overcharged some 1,400 customers. The Irish Mortgage Holders Organisation was telling the Central Bank that the organisation had hundreds of other individuals on its books whom it believed were in the same situation. The finance committee wrote to the Central Bank backing the call from the Irish Mortgage Holders Organisation and that prompted the bank into action. I believe there are serious questions there.

The spirit of the Fine Gael motion is similar in terms of getting to the crux of what happened but a number of crucial parts are missed. I will focus on the Fianna Fáil motion because it is nearly identical to what we are saying, bar two issues. One issue is that it deletes the fact that the Central Bank only acted after the situation had been well known for a number of years. That is a statement of fact and it is a minor issue with regard to the motion. The second issue relates to the reference to the different agencies working together to identify if - not that they are, I have my own views - individuals as well as entities should be held accountable.

The other difference is the Fianna Fáil motion's call for an independent organisation to review the legislation. There is already an independent organisation doing this work. The Law Reform Commission issued a paper earlier this year on white collar crime. The Office of the Director of Corporate Enforcement, ODCE, the Garda and the Central Bank should work together because it is in no way just the responsibility of the Central Bank to investigate this. There are enough grounds already for the two other organisations to carry out their own investigations. I refer to a 2010 submission by the ODCE on white collar crime which is shouting out to us. Let us not forget that we are talking about 1,500 individuals who have had hundreds of millions of euro taken from them. Individuals have lost their houses. In some cases mental health has broken down and there have been other consequences.

Our motion says that we need to strengthen white collar crime legislation. The Fianna Fáil motion is proposing an investigation and then acting on the recommendations. The Sinn Féin motion makes reference to the fact that in 2013, the Central Bank head of financial regulation said that Ireland needs to strengthen white collar crime legislation. He was telling us that the best way to stop this happening in the future was to provide for individual as opposed to institutional accountability.

The submission to which I referred by the Office of the Director of Corporate Enforcement states:

The ODCE has only a partial role with respect to "white collar crime", and therefore our experience is not as extensive as that of An Garda Síochána. Nevertheless, we consider that the following issues may be worthy of short-term or longer-term policy consideration:

- extending criminal liability in the areas of reckless trading...;

- creating new offences in respect of bank fraud, mail fraud, wire fraud and the making of false statements in loan and credit applications;

- raising the penalties for potentially serious "white collar crime" offences;

- extending the periods for investigating/prosecuting particular "white collar crimes" where these periods are unrealistically short;

- clarifying the precise form of a corporation's criminal liability and the duties of its officers to prevent malpractice;

- clarifying the extent to which accused can defend themselves on the basis of erroneous legal advice;

- improving the ability of An Garda Síochána and regulatory bodies to work together to fight "white collar crime";

- introducing a more widespread use of administrative sanctions as an option as well as criminal sanction and, in some cases, decriminalising minor regulatory obligations which are subject to administrative sanction;

- improving the investigation and prosecution of "white collar crime" by the use (or greater use), in appropriate cases, of immunity programmes, plea bargaining, deferred prosecution agreements, certificate evidence and hearsay evidence in criminal investigations; and

- alleviating, where appropriate, the inhibiting impact of legal professional privilege and the exclusionary rule of evidence in "white collar crime" investigations and prosecutions and providing to some extent that witnesses who are not suspects can be compelled to give evidence in such cases.

That is what this particular agency was telling us seven years ago. In 2013, the former Financial Regulator told us it is difficult in the extreme to hold individuals to account as a result of what is contained in the Statute Book.

We must get to the bottom of this scandal. We must find out what happened and ensure the affected individuals have their repayments restored to their proper rate, which is not happening under the current scheme. We need to ensure the appeals process, which is not working in the interests of these customers, is put back in place. We must ensure the Central Bank starts to give this matter the focus, attention and urgency it needs. In addition, we need to ensure this never happens again in another guise. To do that we must take heed of what we were told by the Office of the Director of Corporate Enforcement and the former Financial Regulator. We need to do what everybody in this country knows we must do. After eight years of financial crisis, we bloody well know the system for detecting and penalising white collar crime is not robust enough to hold certain persons within corporate entities - viewed by many as criminals - to account.

I commend the motion to the House. In recognition of the points raised by the Minister and Deputy Michael McGrath, I ask that the Government withdraw its amendment and allow the Dáil to adopt a single voice on this matter. There is little difference in substance between the amendment and the Sinn Féin motion.

Amendment put.

An Leas-Cheann Comhairle

In accordance with Standing Order 70(2), the division is postponed until the weekly division time on Thursday, 26 January 2017.

The Dáil adjourned at 9.45 p.m. until 12 noon on Wednesday, 25 January 2017.