Tracker Mortgages Examination

Dáil Éireann Debate, Tuesday - 2 May 2017

Tuesday, 2 May 2017

Ceisteanna (254)

Pearse Doherty

Ceist:

254. Deputy Pearse Doherty asked the Minister for Finance the extent of the legal rights of persons who are in the scope of the tracker review to compensation above and beyond redress; the way the scale of such compensation might be arrived at; the person or body responsible for deciding whether to provide compensation; and if he will make a statement on the matter. [19705/17]

Freagraí scríofa

Minister for Finance

The Central Bank has advised that it does not have the statutory power to set compensation levels or to compel lenders to implement redress and compensation programmes in respect of failures that occurred prior to the introduction of the Central Bank (Supervision and Enforcement) Act 2013.

As part of the Examination framework, where customer detriment is identified, the Central Bank has clearly articulated its expectations of lenders to provide appropriate redress and compensation to impacted customers in line with prescribed Principles for Redress.

As the Examination progresses, the Central Bank will continue to challenge the position a lender has taken in relation to particular groups of customers to ensure the fair treatment of tracker mortgage customers.

Key elements of the Central Bank’s expectations in respect of redress and compensation for impacted customers include:

- any harm is stopped at the earliest possible time after each group of impacted customers is identified;

- the interest rates applied to impacted customers’ accounts revert to the appropriate tracker interest rate or impacted customers are given the opportunity to revert to such a rate where relevant;

- redress will be provided to impacted customers to return them to the position they would have been in had lenders’ failures not occurred;

- reasonable compensation, that reflects the detriment suffered by individual customers, is provided;

- redress and compensation is to be paid to impacted customers up front at the point of offer and compensation cannot be reduced by virtue of a customer lodging an appeal;

- an additional payment is to be provided to impacted customers at the point of offer to enable them to take independent professional advice regarding the redress and compensation offers made to them;

- an independent appeals process is to be established to address complaints from customers who are dissatisfied with any aspect of the redress and compensation package that they receive from lenders; and

- lenders will undertake not to raise any time limit defences that may otherwise apply if impacted customers make complaints to the Financial Services Ombudsman (the “FSO”) or initiate proceedings before the courts.

The Examination framework also provides that lenders should establish an independent appeals process to deal with customers who are dissatisfied with any aspect of the redress and compensation offers that they receive from lenders in respect of these matters. As the Principles for Redress provide that all redress and compensation payments are made to customers on an upfront basis, customers can accept the redress and compensation offered and still make an appeal. In addition, the impacted customer has the option of bringing a complaint to the FSO or initiating court proceedings.

Template to accompany requests to the Central Bank for material for replies to PQs, Topical Interest Debates (TIDs) and any other briefing that, up to now, went to the Press Office in the Bank

It has been agreed with the Central Bank that this template will be used with effect from 24 May 2012.

From that date also, there will be a dedicated email address for requests. Please use instead of the Press email - [e-mail].

-	Name
Department of Finance contact(s)	John Fitzpatrick, Leonard Wall
Contact telephone numbers	01-6045698 076-1007682
Contact email address	[e-mail] [e-mail]
Deputy submitting PQ or TID	Pearse Doherty
PQ reference number	PQ 19705/17
Date for answer, priority, written or oral	Written, 01/05/2017
Deadline time for reply from the Central Bank	24/04/17 (11am)
	To ask the Minister for Finance the extent of the legal right of persons that are in scope of the tracker review to compensation above and beyond redress; the way the scale of such compensation might be arrived at; the person or body responsible for deciding whether to provide compensation; and if he will make a statement on the matter.
Draft reply or material for inclusion in reply. This material to be completed in Word in the column opposite to facilitate ‘cut and paste’ in D/Finance	The Central Bank does not have the statutory power to set compensation levels or to compel lenders to implement redress and compensation programmes in respect of failures that occurred prior to the introduction of the Central Bank (Supervision and Enforcement) Act 2013 (the “2013 Act”). As part of the Examination framework, where customer detriment is identified, the Central Bank has clearly articulated its expectations of lenders to provide appropriate redress and compensation to impacted customers in line with prescribed Principles for Redress. As the Examination continues to progress, we will continue to challenge the position a lender has taken in relation to particular groups of customers to ensure the fair treatment of tracker mortgage customers. Key elements of the Central Bank’s expectations in respect of redress and compensation for impacted customers include: - any harm is stopped at the earliest possible time after each group of impacted customers is identified; - the interest rates applied to impacted customers’ accounts revert to the appropriate tracker interest rate or impacted customers are given the opportunity to revert to such a rate where relevant; - redress will be provided to impacted customers to return them to the position they would have been in had lenders’ failures not occurred; - reasonable compensation, that reflects the detriment suffered by individual customers, is provided; - redress and compensation is to be paid to impacted customers up front at the point of offer and compensation cannot be reduced by virtue of a customer lodging an appeal; - an additional payment is to be provided to impacted customers at the point of offer to enable them to take independent professional advice regarding the redress and compensation offers made to them; - an independent appeals process is to be established to address complaints from customers who are dissatisfied with any aspect of the redress and compensation package that they receive from lenders; and - lenders will undertake not to raise any time limit defences that may otherwise apply if impacted customers make complaints to the Financial Services Ombudsman (the “FSO”) or initiate proceedings before the courts. The Examination Framework also provides that lenders should establish an independent appeals process to deal with customers who are dissatisfied with any aspect of the redress and compensation offers that they receive from lenders in respect of these matters. As the Principles for Redress provide that all redress and compensation payments are made to customers on an upfront basis, customers can accept the redress and compensation offered and still make an appeal. In addition, the impacted customer has the option of bringing a complaint to the FSO or initiating court proceedings.