Brian Stanley (Laois, Sinn Fein)
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42. To ask the Minister for Finance if he is satisfied that all affected cohorts of tracker scandal victims have been treated fairly; and if he will make a statement on the matter. [25534/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Central Bank’s Tracker Examination is focused on ensuring that lenders provide fair outcomes for all groups of customers impacted by tracker related failings both from a contractual and transparency perspective.  

The Examination is the largest, most complex and most significant supervisory review that the Bank has undertaken to date under its consumer protection mandate and requires all lenders, which offered tracker interest rate mortgages to their customers, to review all mortgage accounts, including accounts in arrears, to identify any tracker related failings both from a contractual and transparency perspective. The Central Bank does not make the decision on what is impacted or not, this is the responsibility of the lender. However, the Central Bank reviews and challenges the lender, where appropriate, on its conclusion.

Where affected customers have complained to their lender and remain dissatisfied with the outcome of the complaint, and do not accept the findings of the Appeals Panel, they also retain the option to bring a complaint to the Financial Services and Pensions Ombudsman  or FSPO. The FSPO presents customers with a means of resolving their complaint in an independent, fair and transparent manner that takes account of their unique personal circumstances, through an informal dispute resolution process or formal investigation.

As noted in the Central Bank Tracker Mortgage Examination Redress and Compensation penultimate Update, which was published in February 2019, the Examination has now been completed at the majority of lenders.  In the case of the remaining lenders, supervision work continues, as the Central Bank must ensure that the work carried out by lenders is sufficiently rigorous and thorough to have addressed satisfactorily any remaining issues affecting groups of customers and to ensure that all eligible groups of customers are included for redress and compensation.

In addition, the Central Bank Governor noted in his opening statement when he appeared before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach on 26 March this year that a total of €665 million has so far been provided to impacted customers. This figure includes €47 million for redress and compensation to impacted customers identified outside of the industry wide examination.

The Central Bank’s priority at all times throughout the Examination has been to make sure that all affected groups of customers have been identified and remediated.  The Government supports the work carried out by the Central Bank and I have been advised by the Bank that a final update on the Tracker Mortgage Examination will be published in the coming weeks.

Maureen O'Sullivan (Dublin Central, Independent)
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43. To ask the Minister for Finance his views on the treatment of persons affected by a controversy relating to a bank (details supplied); the level of compensation offered; if he has a role in ensuring that customers receive fair treatment from financial institutions operating here in view of the fact he is a shareholder within the bank; and if he will make a statement on the matter. [25437/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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I would remind the Deputy that as Minister for Finance there are strict rules around how I can intervene even in banks in which the State has a shareholding. The day to day operations of the banks are the sole responsibility of the boards and management teams and each bank must be run on an independent and commercial basis. The banks’ independence is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market. 

However this Government has firmly supported the work of the Central Bank of Ireland to ensure that customers receive fair treatment from the financial institutions involved. As the Deputy will be aware, the industry wide Tracker Mortgage Examination review is the largest, complex and most significant supervisory review in the history of the Central Bank of Ireland in respect to its consumer protection mandate. It has revealed the unacceptable damage that misconduct can cause to consumers up to and including the loss of their homes and properties in some cases. To this end there has been €665 million of redress and compensation issued to customers at end February 2019.

To further support the work and power of the regulator, I am bringing forward the Central Bank (amendment) Bill which will introduce an advanced Senior Executive Accountability Regime (SEAR) which will, in tandem with new enhancements to the fitness and probity regime, help prevent something like the mortgage tracker issue happening again. 

The Central Bank has intervened on prevailing rate issues in line with its regulatory engagement via the Examination. This intervention is aligned with the Central Bank’s functions as part of the Examination to rigorously test and challenge, from a systemic perspective at the macro level, the position adopted by lenders to try and achieve the best result for all customers within a group.

The AIB prevailing rate customers have, directly as a result of the Central Bank’s intervention, been admitted to the Examination and will receive a compensation payment as well as an offer of the current prevailing rate, as opposed to the prevailing rate at the time their fixed rate expired.  By securing their admission to the Examination, the Central Bank has ensured that those customers have the opportunity to utilise to the full extent, the Examination’s appeals processes. Should they be dissatisfied with any aspect of their redress and compensation offer and can pursue their case based on their own unique circumstances with the Financial Services and Pensions Ombudsman.

The Central Bank examined AIB’s model to determine the then prevailing rate and concluded that based on the information then available, that it was reasonable. In relation to the contractual interpretation of the term “prevailing rate” the Central Bank formed the view at the time that at a macro level, it could not mount a legal challenge on behalf of all customers in the relevant group, that a rate other than the then prevailing rate should be offered.