Irish Nationwide settles case against ombudsman

A DISPUTE between the Irish Nationwide Building Society and the Financial Services Ombudsman over the society’s charges for early repayment of commercial loans has been settled on terms at the High Court.

On the basis of that settlement, Mr Justice Frank Clarke yesterday struck out the proceedings brought against the ombudsman Joe Meade by the INBS, and made an order for costs in favour of Mr Meade.

The terms of settlement include an undertaking by the society that “all loan termination payments will, so far as consumers (as defined in the Central Bank Financial Services Authority of Ireland Act 2004 and Statutory Instrument 190 of 2005) are concerned, be calculated as a genuine pre-esimate of the society’s loss on early termination”.

Given that undertaking, the ombudsman agreed it was not necessary for the society to change its rules in the manner which it had challenged.

In January, he had decided the society was to refund €30,000 of a €74,000 early loan redemption charge it had imposed on a commercial borrower. He had also directed that the society’s practice of levying automatic charges of six months’ interest for early repayment of commercial loans be altered.