By Pádraig Hoare
About 3,200 customers affected by the tracker mortgage scandal have still not received redress and compensation almost three years after a Central Bank examination into the scandal began.
Governor of the Central Bank, Philip Lane told TDs and senators at the Oireachtas Finance Committee that of 38,400 customers affected by the scandal, 93% had got back the money wrongly taken from their accounts, as well as compensation, to the cost of €580m.
Most of the 3,200 will be paid back by the end of the year, but the watchdog’s director general of financial conduct, Derville Rowland, said it could be into 2019 for all to receive redress and compensation.
Four of the five major banks embroiled in the scandal have made “reasonable progress” but one bank remains lagging behind, Mr Lane said. He declined to name the bank making unsatisfactory progress because of ongoing investigations, but it is thought to be Ulster Bank.
During a hearing on the culture of banking report by the Central Bank, Mr Lane, Ms Rowland, and deputy governor Ed Sibley, said there remained a disconnect between the banks and their customers.
Ms Rowland declined to say if the Central Bank had made complaints to the authorities of a criminal nature, but did confirm the watchdog remains in dialogue with gardaí and criminal agencies regarding the tracker scandal.
“We remain in discussions, and we take such matters very seriously,” she said.
Mr Sibley said the final bill for the tracker mortgage scandal, which happened when customers were wrongly moved onto more expensive loans by more than a dozen lenders, would be “in and around” €1bn.
Sinn Féin finance spokesman Pearse Doherty said the Central Bank was “behind the curve” for holding individuals to account for bad behaviour, unlike the Financial Conduct Authority in the UK.
Tough measures had been implemented for two years in the UK, Mr Doherty said, but still not in the Republic.
Mr Lane said the Central Bank had “no less ambition here” than the authority had for the UK, but said that the watchdog simply could not guarantee banks would behave well all of the time.
Holding individual bankers responsible for bad conduct of institutions could scare off such personnel and lenders from Ireland if implemented, Mr Lane said — a statement Mr Doherty described as “telling”.
Committee chairman John McGuinness said the culture of banking report had comprehensively shown nothing has changed since the bank bailout of 2008, saying the “same arrogance” remained.
“Customers still experience the same aggression, the same rude manners that looks to protect the banks at all cost. I find it amazing the Central Bank has to remind these banks that these people affected are customers.
“The tracker issue is the really big example of ripping off customers and telling them to get lost,” Mr McGuinness said.
Ms Rowland said the jury is out on whether banking culture would become more customer-focused but that the obligation was on businesses to do so.
The Central Bank has ongoing active enforcement investigations into the five main banks and the watchdog took the matter of enforcement very seriously, she said.
