Federation apologises to bank customers

THE Irish Banking Federation has apologised to bank customers for “letting them down” and said work was being done to rebuild trust.

Chief executive of the IBF Pat Farrell came under fire from politicians angry that banks had not done enough to take responsibility for the financial crisis.

He was told its new statement of intent towards distressed mortgage holders did not go far enough.

And he was asked why financial institutions were so slow to change senior managers despite their wish to convince the public a culture of reckless lending had changed.

However, Mr Farrell apologised for the banking sector and said he “fully understood the depth of public anger” towards his members.

“I unreservedly apologise and regret that we let down our customers,” he said.

Appearing before the Oireachtas committee on regulatory affairs Mr Farrell said the banks had hard lessons to learn.

He said he hoped the institutions had made some progress in making amends, but accepted at this moment trust levels have been “set to nought”.

He said banks were committed to doing everything in their power to avoid bringing homeowners to court.

Fine Gael’s Kieran O’Donnell said it was not good enough for banks to play the poor mouth. And said the lenders would not be deserving of trust until they were willing to open up their businesses to a greater level of transparency.

He demanded to know what policies were being adopted towards small businesses and to what extent normal lending would resume after the NAMA legislation is passed.

Mr O’Donnell said the banks should also publish details on the precise amount of credit being extended to existing business customers and details of how overdraft facilities to these customers were being treated.

The Labour Party’s Sean Sherlock said it was disingenuous of the banks to now be teaming up with the Monetary Advice and Budgetary Service (MABS) to help troubled borrowers without providing financial support to the agency.

Mr Sherlock said MABS offices were “at the pin of their collar” and asked the banks to provide financial assistance for the services offered.

His party colleague, Ciarán Lynch, said MABS had originally been established to deal with unscrupulous moneylenders and it was fitting that it was now called upon to help the main banks’ customers.

Mr Farrell said it was clear banks had not managed risks effectively but this was being addressed. And he criticised the actions of the Irish Financial Services Regulatory Authority at the height of the boom.

He said the regulatory authorities spent too much time on measures like the infamous “I don’t know what a tracker mortgage is” adverts and not enough on policing banks.

Mr Farrell said regulators would have done a better job protecting customers had it instead focused on banking practices.

He said the television commercial, aired at the height of the boom, reflected an emphasis on consumer information and not an effort to ensure the banks were sound businesses.