'Who's protecting consumers?' - Banks' 'paltry' fine over tracker scandal cost lives
The chair of the Oireachtas Finance Committee John McGuinness said it is time for the Central Bank to publicly make full disclosure on their engagement with AIB and what they learned, now that the fine has been issued. File photo: Leah Farrell / RollingNews.ie
The record €96 million fine for AIB and EBS over the tracker mortgage scandal is “paltry” in the context of the lives lost and affected by what the banks did, leading politicians have said.
Government and Opposition TDs have united in their condemnation of the banks’ mistreatment of customers and have angrily demanded to know why no banker has been held to account over the scandal.
Finance Minister Paschal Donohoe is under fire for delays in bringing forward legislation to tackle white-collar crime four years after it was promised.
The Central Bank fines bring the total sanctions imposed on lenders for tracker mortgage failings to €174m, on top of €737m paid to customers in redress and compensation under the Central Bank-initiated Tracker Mortgage Examination.
The banks were fined for overcharging more than 12,000 customers and 93 breaches of regulations. Speaking to the , the chair of the Oireachtas Finance Committee John McGuinness said there has to be personal accountability for what happened.
“In the context of the number of lives lost and affected by the tracker scandal, this fine is paltry,” he said.
Mr McGuinness said it is time for the Central Bank to publicly make full disclosure on their engagement with AIB and what they learned, now that the fine has been issued.
He said the country needs a community banking model not driven by greed or a goal to satisfy the few.
“Is there anything else the public should be aware of? Will the Gardaí open an investigation and prosecute where necessary? Where stands the European Central Bank?” he said
Sinn Féin’s finance spokesman Pearse Doherty said AIB and EBS have caused serious harm to customers and ruined many lives.
“To date, they have been forced to pay back over €230 million to affected customers but the irony is that AIB and EBS will pass on these costs to their customers,” he said.
Mr Doherty said four years ago, the Central Bank called for legislation that would hold senior bankers to account.
“Four years later we still have not got the final Bill published by the Government that would hold senior bankers to account. That is unacceptable and shows the lack of priority the Government has in respect of the matter. When will this legislation that is so long overdue be published? When is it likely to take effect?” he asked of Mr Donohoe.
In response, Mr Donohoe said the scale of the fine imposed by the Central Bank on these two banks shows the strength of the country's regulatory system and how seriously the State and the Central Bank are taking unacceptable behaviour in respect of tracker mortgages.
He said the legislation demanded by Mr Doherty “has taken some time to draft”.
“It required pre-legislative scrutiny and required much work by the Attorney General and my Department. I will be bringing the final proposals to Cabinet next week and the legislation will be published before the summer recess,” he said.
In its statement, the Central Bank said it imposed fines of €83.3m on AIB and €13.4m on EBS (which is AIB-owned) respectively.
The outcomes represent the fourth and fifth tracker mortgage enforcement outcomes, with just one firm-level investigation remaining open in relation to a separate lender, it said.
The Central Bank determined the appropriate fine to be €119m, which was reduced by 30% to €83.3m in accordance with the settlement discount scheme provided for in the Central Bank. This will be paid to the Irish taxpayer.
The fine is separate from the more than €125m that AIB has been required to pay to date in redress, compensation and account balance adjustments to impacted customers, including as part of the Central Bank’s Tracker Mortgage Examination.
A Central Bank report in 2019 found that 99 people had lost their homes, while 216 lost a buy-to-let property. The average redress paid in respect of the loss of a home is €194,000, but more than 3,000 customers have appealed compensation offers to date.
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