John McGuinness: Banks must come clean on tracker mortgage scandal

The numbers involved in the tracker mortgage scandal will rise further and the banks must “now come clean” as to its full extent, says John McGuinness, chairman of the Oireachtas Finance Committee.

He said the committee will hold further meetings with the Central Bank and the Ombudsman to seek to find out the extent of the crisis.

He was speaking after the Central Bank delivered its report to Finance Minister Paschal Donohoe that shows more than 33,000 affected cases have been identified.

Speaking to the Irish Examiner, Mr McGuinness said: “We will hold further meetings in the new year. It is clear Padraic Kissane was correct. This will get worse and bigger in terms of the numbers affected.

“I would urge the banks to get ahead of this and come clean and make sure adequate and fair compensation is given to those affected, which would mean substantial compensation in some cases.”

The need for accountability at both the institution and individual senior executive level is imperative, said Fianna Fáil finance spokesman Michael McGrath.

He said: “The real story behind today’s update is that the lenders did not voluntarily reveal the full extent of the tracker mortgage scandal. It is evident that the Central Bank had to seriously flex its muscles to force the lenders to face up to the scale of this scandal.

“The Central Bank should be commended for doing its job and the lenders should be slammed for having to be dragged kicking and screaming to the truth.”

Mr McGrath said the absolute priority now is to ensure all 26,600 customers in this current examination get the justice they deserve. This has to include fair and reasonable compensation which takes account of their individual circumstances, he said.

“Beyond looking after those affected, this scandal really has to be a watershed in Irish banking. The Central Bank expects that all the main lenders will face enforcement investigations. People will be sceptical about the effects of this. At the end of this process, there simply has to be real accountability — for both the institutions but also for anyone identified within them as being responsible for this in the first place.

“It was hardly an accident that all the banks made the same mistake — in their own favour.”

Mr Donohoe said he “noted” the conclusion of the Central Bank’s report that the banks have made sufficient progress in meeting the targets they agreed to two months ago in terms of rectifying the position of customers adversely affected by the tracker scandal.” I also note that compensation payments have begun to be paid to many customers,” he said.

Mr Donohoe said the five banks are making compensation and redress payments in line with the Central Bank’s framework, which ensures fair treatment is assured for customers.

“I am keenly aware of the distress that has been caused to very many customers of the banks as a result of this scandal,” he said.

Labour’s Joan Burton said: “That Irish banks have now paid out nearly €300m highlights how widespread and deep this scandal is, with a total of €900m set aside by five lenders to cover redress, compensation, and costs.

“It is my belief that there now also needs to be an independent investigation into how this happened, and who authorised it, and why it is so widespread across Irish banks. Enforcement action alone is not good enough.”