Tracker mortgage scandal ‘absolutely a crime’, TD claims

Financial scandals such as the mistreatment of tracker mortgage customers will continue until a banker is arrested and faces consequences, Fianna Fáil TD John McGuinness has claimed.

The Carlow-Kilkenny deputy, who is chairman of the Oireachtas finance committee, said it was time for the banks to change their culture at board room level and turn their attention to better treating their customers.

Mr McGuinness told Newstalk's Pat Kenny show that it was "absolutely a crime" that homeowners were wrongly taken off tracker mortgages by their banks.

The Central Bank on Wednesday said there were 33,700 cases of borrowers either being wrongly denied low-cost mortgages linked to European Central Bank rates or put on the wrong rate entirely had so far been detected.

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Sources say banks have so far admitted that at least 37 borrowers have lost their homes as a result of the controversy and a further 79 buy-to-let properties were taken.

Mr McGuinness said it was his firm belief that “until the day that a Garda arrests a banker, this carry on from the bank will continue ruining lives.”

“The higher up the chain you are in a bank the less chance there is of you going to court,” he said.

“From 2009 when the first voices were being raised, to 2014 in the Dáil when we were told by the banks that there was nothing to see here, move along. The banks knew there was something wrong, something rotten, but they continued to cover it up.”

Balance sheets

The Fianna Fáil TD said that as the balance sheets of the banks improved they would go back to treating their customers with contempt.

He claimed that the Central Bank had for too long protected the banks rather than customers.

There is a need for a court that will deal “in a real way” with ordinary people, lay litigants, against the banks.

“People are paying for the banks on the double through taxes and interest rates,” he said. “We have to find some way of changing the culture at board level in banks, to ensure that customers are respected.”

Derville Rowland, director general of financial conduct at the Central Bank, said it had taken longer "than I'd have liked" to identify the numbers affected by the tracker controversy. She said that is because the banks "didn't front into the problem and were slow to identify cases".

“I think we can expect that the vast majority of cases have been identified. All known disputed cases have been identified and been resolved in favour of the customer.”

The Central Bank said on Wednesday that banks have so far paid €297 million in refunds and compensation to customers and “are on course” to meet commitments they made on payments in October.

As of the middle of December, 9,200 of the 13,000 customers identified across the industry in September had received €170 million in refunds and compensation. Most of the remaining should receive money by the end of the year, it said.