Gerry Horkan (Fianna Fail) | Oireachtas source

I thank the Cathaoirleach. I understand that we are a bit constrained by other business. I will try to be as brief as I can. I thank the Minister of State for being here. I also thank the Leader. I called on him to arrange a debate in the Seanad on tracker mortgages during the Order of Business at one point. All of us here, or certainly a very significant number of us including Senators Kieran O'Donnell, Rose Conway-Walsh and indeed, previously, the Minister of State, were discussing this issue in the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach as far back as last December and earlier.

I welcome the opportunity to speak on the issue of tracker mortgages today. Fianna Fáil supports the thousands of customers who have been denied their contractual right to return to the tracker mortgage rates and the customers who were put on incorrect tracker rates. Bank of Ireland recently announced that a further 6,000 customers were affected by the scandal on top of the 13,000 customers identified by the Central Bank examination, as reported in October. It is frustrating that these were contested accounts which Bank of Ireland did not originally want to admit to, although it has now put its hands up and said that these customers are to be included and were treated incorrectly by the bank.

On 25 October Fianna Fáil brought forward a motion in the Dáil calling on the banks to fully identify all customers affected by the scandal, to instantly restore all affected customers to their appropriate rates, and to pay redress and compensation to all victims without further delay. It called on the banks to provide adequate housing to those who have lost their homes. It is important that we remember some people lost their homes as a result of being put on the wrong rate and of being dealt with inappropriately and not in accordance with their original contracts. It also called on the Government to consider introducing wide-ranging legislation to tackle the regulatory issue, including legalising class action suits and empowering the Financial Services Ombudsman to decide on compensation and redress levels. The motion also calls on the Government to threaten to vote against the board of directors in each of the banks in which the State still has a shareholding.

The Minister met the banks on 23 and 24 October and they released statements on 25 October in respect of their individual examinations. It is still unclear what the Minister said to the banks on this issue. If enforcement orders by the Central Bank are the only outcome of this examination it will not be a satisfactory result. We need personal accountability and a solid explanation as to why 11 institutions acted in precisely the same manner in respect of the scandal. It is fairly difficult to believe that there was not some element of collusion or cartel-like behaviour in what was going on. How could every bank have made the same mistake with their customers in respect of the same type of product?

In early October 2017 the Central Bank published its second update before the Minister's meeting with the banks. According to the Central Bank, the number of customers affected stood at 13,000 at that point although, as we know, the figure is set to increase. With the 6,000 extra customers of Bank of Ireland, we are already very close to 20,000. It is likely that figure will rise further.

It is concerning that there appears to be a contest taking place between some of the banks and the Central Bank, in which banks are arguing that some customers should not be recognised as having been treated badly. As we saw Bank of Ireland contested 6,000 customers. When these customers were announced last month it doubled the number of affected accounts. On 19 October, Central Bank figures appeared before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. It is galling to learn that the banks unofficially threatened the Central Bank with legal action. This is despite all that has transpired with this scandal and the fact that the Irish taxpayer bailed out these banks.

The findings from the Central Bank update are as follows. It believes that two lenders have failed to properly identify affected customers; the lenders’ initial proposals for redress and compensation fell well short of the Central Bank’s expectations and they had to be pressurised consistently to bring them up to an acceptable level; two lenders did not complete phase 2 in a comprehensive manner on time and have much more work to do; the number of customers and tenants who lost their home stands at at least 102 and is set to rise further; the Central Bank imposed enforcement fines on Springboard Mortgages last year; and the Central Bank has commenced enforcement investigations against both Permanent TSB and Ulster Bank.

This scandal is completely unacceptable from the banks yet no credible explanation has been provided as to why this happened in all of the banks at around the same time and in the same way. Despite the banks acknowledging the scandal, they have been incredibly slow to rectify it. Only 40 of the 3,500 Ulster Bank mortgage holders have gotten their money back while KBC have yet to even contact some of its customers and to comply with phase 2. KBC confirmed that it missed the Central Bank's deadline to the committee of which I am Vice Chairman.

Padraic Kissane, a financial consultant who represents many of the victims affected, appeared before the committee. He believes the figure will be much higher in the end, perhaps closer to 30,000, but it remains to be seen if this turns out to be the case. The Governor of the Central Bank indicated that the total number could be at least 20,000. Either way, a very significant number of households, families and individuals have been affected by this.

The effect on mortgage holders' lives is incalculable and in many cases no amount of compensation will be enough to fully come to terms with the pain and suffering caused. As we said, some have lost their homes and many have lost their lives. The stress and suffering that has been added by the banks refusing to take responsibility is shocking. A homeowner, Thomas Ryan, came before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach and told us that he suffered a stroke at the age of 47 and that his wife had a nervous breakdown. They contend that this was a direct result of what happened to them.

Fianna Fáil has long been calling for the banks to take responsibility. If the boot was on the other foot the banks would be tracking customers down for every last cent. Why is it that the banks must be dragged kicking and screaming to pay back this money? The Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach has worked well in exposing much of the issue. As I have mentioned, we have been questioning the banks very thoroughly and they will be before the committee again in January. Some banks are taking the matter more seriously than others but the fact remains that money was wrongfully taken from customers and now needs to be paid back once and for all, and quickly. The priority must be to ensure that those affected will receive restitution as quickly as possible and that the Central Bank moves through the various stages of its process to ensure customers will be treated fairly. We will certainly do our job as committee members in interrogating and dealing with the banks.

I appreciate that we are having the debate. I thank the Minister of State for being here and I again thank the committee for its work. There are switchers, however, who have not been contacted yet - people who switched mortgages and with whom the banks have not dealt. The banks say they do not know who they are or where they are. An individual contacted me after seeing me in the committee and said that his compensation, before redress, will be at least €200,000. That is an enormous amount of money for an individual to be without. He has suffered and his family have suffered. It is a very important issue and I am glad we are discussing it today.