Former Permanent TSB banker faces inquiry over role in tracker mortgage scandal
The inquiry into the conduct of the Permanent TSB executive comes after PTSB itself was fined €21m in 2019 for its part in the tracker mortgage scandal. File picture: Sam Boal
An unnamed former banker at Permanent TSB faces an inquiry into their individual conduct involving the tracker mortgage scandal.
The Central Bank said that it had “reasonable grounds to suspect” that a former manager had broken procedures. A Central Bank spokesman refused to identify the individual.
Such inquiries are uncommon, and this inquiry, which will be led by barrister Peter Hinchliffe, will be the first under Central Bank powers to be conducted into an individual.
It comes after Permanent TSB itself was fined €21m in 2019 for its part in the industry-wide tracker mortgage abuses that involved 12 of its customers losing their family homes and the loss by landlords of 19 buy-to-let properties.
The settlement marked the end of the Central Bank’s tracker probe into Permanent TSB itself. Earlier, in 2016, its former subprime offshoot, Springboard Mortgages, was fined €4.5m for its part in the scandal.
Individuals in banks can be subject to further scrutiny.
“Such cases are referred to inquiry for determination,” it said in a statement.
Coincidently, news of the Central Bank probe came on the day of an Oireachtas finance committee hearing into planned legislation that aims to toughen the powers that the Central Bank has over individual executives at banks.
Finance minister Paschal Donohoe said that the so-called Senior Executive Accountability Regime (Sear) which will be part of the wider legislation, “will facilitate the holding to account of individuals”.
Sear will entail financial firms providing the Central Bank with clear descriptions of the responsibilities of all its senior executives, the minister told the committee.
The full scale of the abuses by banks in the tracker mortgage scandal only started to surface during the financial crash over 10 years ago. The scandal has sparked further public anger over the accountability of senior bank executives in Ireland.
In all, banks will likely pay out €1.5bn in fines and in making good the abuses to their tracker customers.
Ulster Bank this year was told to pay €37.8m — the largest ever fine handed down by the Central Bank — for its part in the tracker scandal which saw the loss of 29 family homes and the overcharging of 5,940 of its own customers.
KBC Bank was fined €18.3m last year, and was berated for bringing “devastating and avoidable” distress on its tracker mortgage customers.
Ulster Bank and KBC are in the process of pulling out of banking in the Republic.
Separate from the tracker probe, stockbroker Davy was fined €4.1m earlier this year for the actions of 16 staff, including senior shareholders, in hiding their role in a sale of a bond from a customer.
Speaking earlier this week, John McGuinness, chair of the Oireachtas finance committee, questioned whether the banks to this day are properly supervised by the Government.
Lessons from the Anglo Irish disaster were still to be leant, he told the , and oversight could be much improved.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
