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Central Bank of Ireland Investigations

Dáil Éireann Debate, Tuesday - 24 April 2018

Tuesday, 24 April 2018

Ceisteanna (118)

Pearse Doherty

Ceist:

118. Deputy Pearse Doherty asked the Minister for Finance the number and nature of investigations the Central Bank has carried out with regard to overpricing or overcharging on commercial loans in the past ten years; the financial institutions involved; the result of such investigations; and if he will make a statement on the matter. [17503/18]

Amharc ar fhreagra

Freagraí scríofa

I am informed by the Central Bank that this can be considered both from the broader enforcement perspective and in terms of consumer protection. Both of these perspectives are outlined as follows.

On the Enforcement side, the Central Bank operates an assertive risk based approach to supervision which is supported by a credible threat of enforcement. The Central Bank’s enforcement strategy is aimed at promoting principled and ethical behaviour in regulated entities and those that work in such entities. The Central Bank takes appropriate action where regulated entities and/or individuals fall short of those expected standards of behaviour.

Since 2006, 118 cases have been concluded through the ASP/settlement procedure. This has resulted in the sum of €61,828,525 being imposed by way of monetary sanctions. Notable cases involving issues of overcharging include the Administrative Sanctions Procedure (ASP) concluded by way of settlement in 2010 involving Allied Irish Banks as well as that concluded by way of settlement in 2011 concerning MBNA Europe Bank Limited.

Public statements on the Central Bank’s settled ASP cases are available on the Central Bank’s website.

In terms of consumer protection, errors by regulated financial services firms are monitored by the Central Bank through a number of supervisory tools, including its on-site inspection work and through the statutory requirement imposed on regulated firms to notify the Central Bank of certain errors within timeframes prescribed by the Consumer Protection Code 2012.  All such errors, including, but not limited to those related to commercial loans that impact consumers, are thoroughly analysed and monitored by the Central Bank to ensure that they are fully resolved, with customers notified and refunded promptly, systems’ failures corrected and controls implemented to prevent a recurrence of the error. 

The Central Bank considers each error on its own merits, with the overarching objective of protecting consumers’ interests, including ensuring that they are not left out of pocket. Excluding the Tracker Mortgage Examination, the figures show that firms have returned €164 million to consumers over the last four years following errors (this figure is not exclusive to errors related to consumer loans). Of this, firms identified and reported €75 million, while the Central Bank identified €89 million through its own supervisory activity.  The Central Bank publishes details of this supervisory work in its Annual Performance Statements (APS).  For example, the APS 2016 – 2017 includes a breakdown of consumer restitution across a number of categories of financial institutions – see page 21 for relevant details (available at the following link):https://www.centralbank.ie/docs/default-source/publications/annual-performance-statement/annual-performance-statement-2016-2017.pdf?sfvrsn=2).

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