John McGuinness (Carlow-Kilkenny, Fianna Fail) | Oireachtas source

I move:

That Dáil Éireann shall take note of the Report of the Joint Committee on Finance, Public Expenditure, and Reform, and Taoiseach entitled "Report on Banking 2022", copies of which were laid before Dáil Éireann on 18th May, 2023.

I acknowledge the role of the secretariat in the preparation of this report, which I recommend to the House. I ask the Government not only to give it and its 20 recommendations serious consideration but also to act on some of the recommendations. This report was compiled over the course of 2022. All the committee members were very engaged in the process. We invited in representatives from the banks and Departments and various stakeholders, and we had many written submissions.

I want to point to the part of the report that refers to whistleblower Jonathan Sugarman, whose story has been well publicised and who worked for UniCredit under Banca d'Italia. He was a senior risk manager and came forward with a report to the Central Bank. He highlighted the errors in the bank and how it was trading recklessly. He has received no recognition for the role he played in exposing what was going on in his bank. In fact, because risk managers are few in number, he has found it extremely difficult to get employment since leaving his position, or since he did the right thing in reporting more than once to the Central Bank that there was a breach of legislation and of the regulatory framework pertaining to his bank. I would like to see the Taoiseach acknowledge Jonathan Sugarman. A public political acknowledgement is necessary. If we are to encourage those who work in banks to come forward and report wrongdoing, we must start at the beginning with Jonathan Sugarman and the other whistleblowers who made information available, some of whom have protected disclosure arrangements in place. I want to see that first and foremost. It would be an indication that the State is finally acknowledging a significant whistleblower in Jonathan Sugarman and the others who came forward with other pieces of information. It might give some hope to the other whistleblowers in various departments who have been blackguarded by the State, not been recognised and in fact ended up, like Jonathan, penalised, out of a job and unemployable. That is not what the State should be doing; it should be protecting those doing the right thing in accordance with legislation, exposing wrongdoing and speaking truth to power. That is what we want people to do.

I acknowledge the likes of David Hall and Padraic Kissane, who lobbied and informed many of the members of the committee and the general public regarding what was going on and also assisted customers of the banks who could not deal with the banks although they were wronged by them.

When the Governor of the Central Bank – not the current one – attended the first meeting I chaired, in the region of 3,500 tracker mortgages were in difficulty. The number is now over 50,000 and it is still not fixed. Banks have been fined. Bank of Ireland was fined €143 million and another institution was fined €186.4 million. AIB was fined €83 million and EBS was fined €13.5 million. Permanent TSB was fined €21 million. There was a previous fine for AIB of €125 million. Thirteen homes were lost in one bank, 15 in another and 12 in yet another. What kind of Central Bank or regulation do we have in place that would at times turn a blind eye to some of the cries for help from the general public? If it were not for the finance committee bringing in those affected by the tracker mortgage issue, putting a human face on the disgraceful behaviour of the banks, we would not be where we are today, would not have had the banks fined and would certainly not have a redress scheme in place, even though it is inadequate. I appeal to the Minister of State to tell the banks to finish off the job they set out to do with the tracker mortgages and pay those who need to be paid.

Some of the tracker mortgages, and indeed some other mortgages, have been sold to the vulture funds. Therefore, vulture funds are now operating in the country. They have a front-of-house service, yet it is impossible for normal clients to deal with them. We should remember these are customers whose loans were sold off by the banks to vultures when they were not able to pay interest at rates of 1%, 2% or 3%. Now the vulture funds are applying rates of anything from 7% to 9%, expecting the same people who were broke in the first place to pay an extraordinary amount. The vulture funds purchased the loans from other banks for little or nothing or at knock-down prices and are being allowed by the State to crease customers with increased interest rates, making enormous profits on the backs of unfortunates and paying little or no tax. Do we want the kind of society where big business can screw over the little guy, even though there is wrong being done to the latter? I would say that we do not and that this is not the way it should be. We should pass legislation or amend the Central Bank regulation to ensure the ultimate amount of protection is offered to the customer. If we do not, we will end up in the same position again, with big businesses and big banks making huge profits. The profits are obscene at the moment, yet the banks are still threatening their customers.

Pepper has roughly 80,000 residential mortgages. Its representatives refused to come before the finance committee. I am not singling them out because they have been co-operative in other ways. However, there is a list of them, including Mars Capital and Start. They should all be made to report on a regular basis to the finance committee. The people elected Members of this House to represent them. They have been appointed to do a job and yet the legislation is preventing them from doing that job by allowing them to be outside of the scope of the finance committee or this Parliament. However, they can go and visit the Department of Finance on a regular basis. They can apply high interest rates to people who are already in trouble, and they have access those at the highest levels of the Government. I just cannot accept that.

The culture board is doing a fine job. I recently attended a meeting chaired by an eminent judge. The board's work is having some impact. The culture I am talking about is on involving particular middle to senior managers and boards. They seem to have no regard for Irish society or for politicians and what we want to achieve in terms of fairness. On the other side, there may be some customers who just will not pay. For the ones who are making an effort, however, we in this House should at least try to protect them. We are constantly told that the protection will travel with the loan to the vulture funds. That is utter rubbish because in order to ensure that happens, it requires the person or family, who are under pressure anyway, to hire someone to fight for their rights, and they cannot afford it. So, what happens? The vulture funds walk all over them.

Ed Honohan has been a great advocate for a correction in the banking system. He has offered legislative information and advice. During the Covid pandemic, I remember sitting to authorise legislation that the courts be allowed to perform on Zoom. Buried somewhere in that legislation was the hearsay evidence passed by the Dáil down in the convention centre where we were sitting at the time. I did not vote for it, thank God; I would not do so. Now that is another tool being used by the banks against the people we represent.

EBS tied agents, after years of campaigning through the finance committee - many of them have died - were given their rightful compensation but AIB fought to the bitter end to avoid that. The Belfry investors, exposed by a whistleblower, also had to fight to the bitter end and some of them have not yet been paid. Some of them have not been recognised as a group that has to be paid. I would like to see them paid. I would like to see the banks owning up to any other issues that they have in the cupboard and commit to rectify the wrongs of the past. A discount formula is used regarding the fines that they pay. The Central Bank fines them fines and then adds a discount. Someone fined in the courts must pay up. As the Central Bank is the court for the banks, they should pay the full amount of money and no effort should be spared in the context of insisting that they come to terms with all of the issues that they have.

Switching has been mentioned. Those under most pressure are the ones within the whole vulture fund representation in terms of their mortgages. How can they switch? They have a bad credit rating. We are asking that they be switched to a standard mainstream bank outside the clutches of the vultures. How does that work? Are we going to correct the credit bureau ratings for all these people? Are we going to insist on the vultures doing something different to accommodate them or insist on those banks - Bank of Ireland, AIB and PTSB - do something to ensure that they take those debts back? I do not see any appetite on the part of the Government to take on the vulture funds or indeed the banks to insist that something like this happens. As long as that is the case, we will have an imbalance in our system. The vulture funds and the banks will continue to dictate what they want to do. The finance committee has 20 recommendations here, with a significant number of documents attached to prove the points that we were making and they should be taken note of.

Ulster Bank and KBC have left the country. They left behind them many cases that remain to be resolved. Bank of Scotland and NatWest are under scrutiny in the UK. We should be linking in with the UK authorities to ensure that any Irish customer who has been affected in any way at all is given fair play. That is what we should be doing because our banking inquiry, going way back then, as described by Jonathan Sugarman, was a waste of time and a whitewash. I believe that is the case because there was a certain way of conducting that banking inquiry that could have exposed everything as was done with the DIRT inquiry, but that was not followed. There was a certain parameter and shape put on that inquiry that did not do the job it was supposed to do.

This is a work in progress. We continue to meet the banks. We continue to deal with the issues that we are faced with arising from the banks. It is an unfinished piece of work that will take some time to bring to an end. I appeal to the Minister of State to bring the Government on board in what we are trying to do and to insist on fair play for the citizens we represent, who are being robbed of a quality of life that they should have.

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