Ex-manager at Irish Nationwide Building Society disqualified for breaching financial services law

Ex-manager at Irish Nationwide Building Society disqualified for breaching financial services law

A former senior manager at Irish Nationwide Building Society (INBS) has been fined €23,000 and disqualified for 18 years by the Central Bank after his involvement in breaching financial services law.

However, when asked if any other members of credit committees across other financial institutions had been sanctioned for lending activities during the boom years, the Central Bank would only say it "does not comment on ongoing or potential enforcement cases" but that it was committed to holding individuals to account where their actions warrant it.

Tom McMenamin was senior manager of commercial lending INBS and admitted his participation in multiple failures by the former building society to adhere to its own policies and procedures in relation to commercial lending and credit risk between August 1, 2004, and September 30, 2008.

These included not properly documenting commercial loan applications including borrower information; not following loan approval processes; not following processes in relation to security and loan to value ratios and not monitoring commercial lending.

The Central Bank said the breaches warranted a fine of €250,000 but that legislation did not allow it to impose a fine that would bankrupt a person.

"In such circumstances and having regard to the current financial position of Mr McMenamin, the Central Bank has imposed a reduced monetary penalty of €23,000," it said in a statement.

In deciding on the appropriate sanctions to impose, the Central Bank said it took a number of factors into account. These included the "reckless" nature of Mr McMenamin's conduct, his "admitted failure to meet the required standard of competence, skill, and professionalism" in carrying out his responsibilities and the "extended duration" of the admitted breaches.

The Central Bank said the failings admitted by Mr McMenamin demonstrated "a serious lack of due skill, care and diligence" in carrying out his role and responsibilities as senior manager of commercial lending at the former financial institution.

"Mr McMenamin accepts that he participated in a pattern of systemic policy breaches by INBS leading to poor risk management, ineffective governance and an overall culture of high-risk lending. In this respect, his actions and/or omissions were not deliberate or dishonest. INBS’ financial instability lead to its ultimate collapse," said the Central Bank.

Director of enforcement and anti-money laundering Seána Cunningham said he had failed in responsibility as the most senior manager of commercial lending at INBS and has been sanctioned accordingly.

"He failed to discharge his responsibilities in the day-to-day management and operation of the commercial lending function and disregarded requirements for commercial loans to comply and adhere to INBS’ policies on commercial lending and credit risk.

"The sanctions imposed on Mr McMenamin reflect the serious nature of his conduct. This type of behaviour gave rise to a pattern of systemic policy breaches by Irish Nationwide Building Society leading to poor risk management, ineffective governance and an overall culture of high-risk lending," she said.

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