‘More bank overcharging cases on the way’

CONSUMERS are set to be hit with a ‘double whammy’ of more bank overcharging scandals and increased mortgage rates, according to the new Financial Regulator.

Matthew Elderfield told a Dáil Committee Ireland’s recent climate of low mortgage rates was a direct result of the country’s flawed banking system and that a clean-up of the banks will partly result in rising rates for borrowers. Each of the three leading Irish lenders has moved to increase mortgage rates in the past couple of months.

“Part of the reason for such favourable rates was that the banks’ business models were, as we now know, fundamentally flawed. That skewed business model now needs to be fundamentally recalibrated and at a time when banks’ costs of funding are significantly higher. Interest rate increases for borrowers are an unfortunate, but inevitable, consequence of this new world,” Mr Elderfield told a sitting of the Joint Oireachtas Committee on Economic Regulatory Affairs.