Central Bank checks on the rise

The Central Bank is cracking down on banks, insurance firms and stockbrokers by ramping up site inspections and enforcement procedures.

The bank has published a list of themed reviews and enforcement priorities for this year. Not surprisingly top of the list of themed reviews is on mortgage arrears.

The Central Bank will be sending inspection teams to the banks to assess how they are complying with the code of conduct on mortgage arrears. Last month, the Central Bank governor, Patrick Honohan, faced a barrage of criticism from members of the Oireachtas Finance Committee for the lack of progress on resolving the mortgage arrears crisis.

Last Sunday, Mr Honohan told RTÉ’s The Week in Politics that he was still not satisfied that the banks were dealing sufficiently with this problem.

If, following a themed review, the Central Bank is not happy with the level of compliance with the relevant rules and requirements, then it may take enforcement action where breaches are identified.

The Financial Ombudsman and various enforcement agencies have exposed over the past few years a number of bad, and often illegal practices, that were rife across the financial sector. These include the mis-selling of life assurance policies; over-charging; withholding important information and abuse of client assets.

The themed reviews are aimed at improving the level of compliance with the new regulatory framework.

The Central Bank will look into how banks, insurance firms, and stockbroking firms have structured staff remuneration and sales incentives to ensure they comply with the consumer protection code among other regulatory requirements.

Review teams will also make sure that stockbroking firms are providing accurate and timely information on the products they have sold and there is full transparency on their fee structures and charges. There will be a review of how insurance firms handle the settling and processing of property claims to ensure compliance with the consumer protection code.

There will be a look into the controversial area of moneylenders to ensure that these firms are abiding by rules on the maximum cost of credit.