Michael McGrath (Cork South Central, Fianna Fail)
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241. To ask the Minister for Finance if the Central Bank is responsible for enforcing the unfair contract terms directive 1993 and the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 for banks and regulated financial service providers; if it has taken enforcement action on banks and lenders in respect of consumer mortgage contracts; if enforcement actions have taken place regarding persons who were denied tracker mortgage rates; and if he will make a statement on the matter. [19390/17]

Michael Noonan (Limerick City, Fine Gael)
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The European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 [S.I. No. 27 of 1995] (the ‘1995 Regulations’), which gives effect to Council Directive No. 93/13/EEC (the ), is a designated statutory instrument for the purposes of the Central Bank Act 1942 (the ‘1942 Act’).

Accordingly, if the Central Bank suspects on reasonable grounds that a regulated financial service provider is committing, or has committed, a contravention of the 1995 Regulations it may hold an inquiry to determine whether or not the financial service provider is committing or has committed the contravention or it may enter into a settlement agreement with the financial service provider to resolve the matter.

If, at the conclusion of an inquiry, the Central Bank finds that the financial service provider is committing, or has committed, a contravention of the 1995 Regulations it may impose one or more of the sanctions listed in Section 33(AQ)(3) of the 1942 Act, including a reprimand and a direction to pay a monetary penalty to the Central Bank. Settlement agreements entered with the financial service provider may include terms under which the financial service provider accepts the imposition of sanctions of the kind referred to in Section 33(AQ) of the 1942 Act.

As the Deputy is aware, the Central Bank concluded an enforcement investigation into tracker mortgage-related matters at Springboard Mortgages Limited (‘Springboard’) in November 2015. In the course of the investigation the Central Bank found that Springboard failed to apply correct interest rates to 222 customer accounts over a seven-year period between August 2008 and July 2015.

Pursuant to the settlement agreement entered with Springboard to conclude the investigation, the Central Bank issued a reprimand and imposed a monetary penalty of €4.5 million on Springboard. The monetary penalty paid by Springboard is the highest penalty ever collected by the Central Bank further to an enforcement investigation. In addition to the reprimand and monetary penalty, the Central Bank also required Springboard to implement a major redress and compensation programme for impacted customers during the course of its investigation. To date Springboard has provided redress and compensation in the amount of approximately €5.8 million to impacted customers.

The Central Bank has also commenced enforcement investigations into tracker mortgage-related matters at Permanent tsb plc and Ulster Bank Ireland DAC.

The Central Bank may also commence other enforcement investigations, as appropriate, into other lenders and persons concerned in the management of such entities where there is evidence of non-compliance with regulatory requirements.

Template to accompany requests to the Central Bank for material for replies to PQs, Topical Interest Debates (TIDs) and any other briefing that, up to now, went to the Press Office in the Bank

It has been agreed with the Central Bank that this template will be used with effect from 24 May 2012.

From that date also, there will be a dedicated email address for requests. Please use instead of the Press email - .

Note

Any other relevant information e.g. in the case of oral questions, material which the Central Bank considers could be used for supplementary questions and for briefing the Minister.

Department of Finance/Central Bank

May 2012