Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

On behalf of the Green Party I am very happy to support the motion presented by Sinn Féin. I commend the party for raising the issue and the work that has been done in the Oireachtas committee over the past year and a half or two years. A number of points have been raised by people who have been actively engaged with the matter and one of the first recalled is that the Central Bank has been particularly slow and did not respond with the urgency desired of a consumer protection agency. That is deeply disappointing after having gone through such a dramatic banking crash and after trying to put in place the necessary legislative means to help the Central Bank, which had failed in its core operation of looking after the financial health of our institutions. The new structuring of the Central Bank and how it breaks down affairs of the consumer, banks and other Central Bank roles is clearly not working. The Central Bank has real questions to answer as to why it has not been more proactive and why it was not quicker in responding to this evolving scandal. It is not like this has just emerged in the past few months or even the past year. Victims of this crime were raising the matter long before that but they were not heeded and their case was not heard with sufficient urgency.

I am raising information from colleagues or friends who have been involved in the process. Their message is that the problem is ongoing and it is not an historical legacy. There are still banks and institutions pursuing customers but not upholding protections that exist in contracts. They are using every legal trick and mechanism to get consumers out of tracker mortgages. This is still happening.

The wider concern I have to a certain extent is what this says about the Irish banking system. One would think after the scale and nature of the crash we experienced, there would be a system that would, more than anything else, try to restore trust. It should treat customers in a scrupulously fair manner. I do not wish to pick on any one institution but I am aware of AIB because I am a customer. It is a State-owned bank.

For the past 30 or 40 years, the bank has been involved in a series of scandals. We have seen the DIRT inquiry, the ICI scandal in the 1980s, the Rusnak scandal and the foreign exchange scandal in which €65 million was defrauded through the bank under improper foreign exchange regulations. All of these scandals occurred before the banking crash and the insane lack of security and attention to lending and risk management processes. For such a bank to be caught again is extraordinary.

We know 3,000 customers have been affected and some 14 households were forced to lose their homes on the back of the improper treatment of tracker mortgages. It is deeply disquieting that we do not seem to have learned the lessons or know about proper banking and the propriety needed to enable people to raise deposits and extend loans. This applies especially to mortgages, which have such a profound effect on the lives of people. It is deeply concerning that the lessons do not seem to have been learned. We should address this as well as the commendable actions set out in the motion. We should be looking to the core and the very nature of banking in our society.

The Green Party has been presenting a particular proposal on the concept of public banking. We will continue to do so in the Dáil, should we get the Private Members’ time. The concept is based on old-fashioned precepts based on strong contact between the bank manager and the customer. I gather a similar idea was included in the rural development plans yesterday. This should be an essential part of any development in this area. We need to start to develop new ethical professional banking systems.

At the core of this model is a close relationship between the bank manager and the customer. The lack of such relationships is one of the reasons things have broken down. We changed the nature of the banking system 30 or 40 years ago. The system went in the direction of target-based lending with various incentives if managers met or issued a certain number of loans. This put serious pressure on staff in banks, especially in the tracker mortgage area, and encouraged staff not to give customers the break and not to do the right thing. Instead, they became obsessed with the target-based measures of progress. This got the bank and so many of our other financial institutions in to real trouble.

We need to direct the Central Bank to take far swifter and more rigorous action. We need to examine what white collar crime measures may be applied. However, we need to learn wider lessons about the nature of banking and lending. It is not only a question of the risk side. The responsibility side was clearly forgotten in this instance, to the cost of at least 15,000 households. This House is rightly standing up for those households.

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