Tracker mortgage inquiry hears former PTSB chief executive 'singled out'

David Guinane served as chief executive of PTSB between 2007 and 2012. 

As a result of this inquiry, David Guinane could find himself the first individual sanctioned for his suspected involvement in the scandal.

A Central Bank inquiry into the alleged role a former chief executive of PTSB played in the tracker mortgage scandal has heard that he is being “singled out” by regulators who are in search of a “scapegoat”.

David Guinane, who served as chief executive of PTSB up until 2012, is the first individual to be put before a public inquiry as part of the Central Bank’s investigation into the tracker mortgage scandal.

The inquiry, which began on Wednesday, is being overseen by UK barrister Peter Hinchliffe assisted by John Breslin SC. It is investigating whether Mr Guinane participated in the commission of a regulatory breach by PTSB between January 2009 to April 2010.

Outlining the case, Mr Breslin said the inquiry is focused on a decision by the bank regarding customers who had a tracker mortgage in 2009 and elected to go on a fixed rate which had come to an end.

For some customers, the original tracker mortgage would have produced a lower rate than the one offered by PTSB at the time when the customer switched from a fixed rate back to the tracker rate.

Mr Breslin said that for a “significant cohort” of customers, their original rate was lower, and if they had not been put back on their original rate they could end up paying a higher rate over the lifetime of the mortgage.

The issue was initially raised by customers through the bank’s marketing department which sought legal advice.

On January 16, 2009, Niall O’Grady, PTSB’s marketing manager at the time, emailed Mr Guinane outlining the extent of the issue as well as the option to “allow the customers who actually contact to revert back to their original tracker”.

A couple of days later, after Mr O’Grady sent a second email enquiring whether Mr Guinane was “okay with that”, Mr Guinane responded “okay with that”.

The Central Bank contends that PTSB treated those customers who did not complain about the tracker rate unfairly.

Under the Consumer Protection Code 2006, PTSB is required to ensure that all dealings with customers are done “honestly, fairly and professionally” in the best interests of its customer and the market.

'Unfair'

Mr Breslin noted that Mr Guinane denies that he participated in the prescribed contravention. He added that Mr Guinane contends that it is “unfair” that the inquiry is taking place in 2024 when the alleged contravention took place between 2009 and 2010.

Paul McGarry SC, who is representing Mr Guinane at the inquiry, said his client is being “singled out” and that he was just “following a recommendation that had been put together by others” but those people are not being “pursued in this inquiry”.

“It is not unknown to sometimes seek a scapegoat or for somebody to be the so-called face of a particular scandal, episode or difficulty, but just because that sometimes happens doesn’t make it right or proper,” he said.

Mr McGarry added that nobody is asserting any deliberate wrongdoing on Mr Guinane’s or PTSB’s part.

Since the tracker mortgage scandal emerged, which engulfed the five main banks at the time, the Central Bank has levelled around €1bn in fines. 

The inquiry is expected to run until the middle of March.