Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware, the Central Bank’s Tracker Mortgage Examination requires all mortgage lenders that provided tracker interest rate mortgages in the Irish market to conduct a complete review of their mortgage loan books to assess compliance with both contractual and regulatory requirements relating to tracker mortgages. Lenders’ reviews are required to be conducted in accordance with the Central Bank’s framework for completion of the Examination (the “Framework”) issued in December 2015. The Framework requires lenders to identify all impacted customers and to address customer detriment in line with the Central Bank’s Principles for Redress. Steps being taken by lenders to address customer detriment identified during the course of the Examination include putting customers on the correct interest rates (rate rectification) in order to stop the immediate harm caused to them, and providing redress and compensation.

While the Central Bank is not in a position, due to confidentiality requirements under Central Bank legislation, to comment on the position of individual regulated entities, it has provided aggregated information to the public in relation to the Tracker Examination. The Bank published its most recent aggregate update on progress of the Tracker Mortgage Examination on 20 December 2017. As per the update, as at mid-December, following Central Bank challenge, lenders have included around 33,700 customers as affected by tracker mortgage failings with €297 million paid to that point in redress and compensation. (This includes impacted mortgages identified before the commencement of the industry wide examination.) 

While the Central Bank’s view is that the vast majority of customers have now been identified, the Bank will continue to review, challenge and verify the work undertaken by the lenders, and complete its intrusive on-site inspection programme. The Central Bank will submit a further progress report to me on the basis of end-March 2018 data.  In addition, I have requested the Central Bank to undertake an assessment of the current culture, behaviour and associated risks in Irish retail banks and to consider the further actions that may be taken to ensure that banks prioritise customer interests in the future.   Work is underway on this and I expect it will be finalised by the end of June.  The findings of the report will determine whether any additional legislative or regulatory changes are required to enhance accountability in the banks and to ensure that consumer interests are prioritized.