Dáil Éireann Debate, Thursday - 9 November 2017
45. Deputy John Curran asked the Minister for Finance if details of the scheme of compensation for those wrongly denied tracker mortgages by the banks has been examined by him, his Department and the Central Bank; his views on whether the scheme is fair and adequately addresses the different events and circumstances endured by those affected by this issue; and if he will make a statement on the matter. [47367/17]
Amharc ar fhreagraAs the Deputy is aware, the Central Bank is independent in the performance of its duties in the supervision of regulated financial service providers and it is working to ensure that the Tracker Mortgage Examination is completed as soon as possible. Details of the Framework for Conducting the Tracker Mortgage Examination are available at the following link: https://www.centralbank.ie/docs/default-source/consumer-hub-library/tracker-issues/appendix1-framework-conducting-tracker-mortgage-examination.pdf?sfvrsn=4
It should be noted that 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”). However, the Central Bank has clearly articulated its expectations of lenders to provide appropriate redress and compensation to all impacted customers in line with prescribed principles for redress developed by the Central Bank. In accordance with the Examination Framework, the Central Bank expects that, for all impacted customers, lenders’ redress and compensation offers will restore them to the position they would have been in had the detriment not occurred and that they are appropriately compensated for the detriment suffered.
As per the Central Bank’s status update of 17 October, circa 13,000 affected customers have been identified to date through the Examination, the majority of whom will receive their redress and compensation before the end of the year. Prior to the Examination, the Central Bank ensured a further 7,100 cases involving tracker mortgage issues were rectified and remedied.
The Framework requires that lenders categorise impacted customers by reference to the type and level of detriment suffered. The types of detriment identified range from overcharging due to the application of incorrect interest rates up to loss of ownership of mortgaged properties. The Central Bank advises that the calculation of redress and compensation proposals for customers can be complex. The Central Bank has challenged all lenders with particular regard to their redress and compensation proposals for loss of ownership situations and as a result lenders have substantially improved their proposals. Each lender's compensation package is tailored to the specific circumstances of its customer. Given the complexity of the issues identified by the Examination, the scale of detriment suffered is unique to each individual customer, and the level of the redress and compensation payment will, therefore, be dependent on the circumstances of each individual case. The Central Bank will continue to challenge and use all powers to force the best outcomes for all impacted customers.
In line with the Central Bank Principles for Redress requiring 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 to the appeals panels required to be established by lenders. Customers’ rights to make appeals to the FSO and through the courts are also preserved.
