Banks should be restricted over mortgage scandal, TD says

Call comes as new figures show 12,500 customers had mortgages changed

Financial institutions found to have wrongly removed homeowners from tracker mortgages should have restrictions placed on their banking licences, the chairman of the Oireachtas committee investigating the controversy has said.

Fianna Fáil TD John McGuinness made his comments as the Central Bank published new figures showing 12,500 customers were identified up to the end of June as having their mortgages changed.

The minutes of July’s Central Bank commission meeting were published yesterday and noted that the Central Bank’s tracker mortgage examination was continuing.

The minutes said “about 12,500 customers in total” had been “identified by lenders as being impacted as at end June 2017, of which 92 per cent of accounts requiring rate rectification have had their rate rectified”.


Some 7,000 cases had already been dealt with before the Central Bank examination started in 2015, with some sources speculating the final figure will be between 20,000 and 25,000 customers.

The Central Bank will publish an update on Tuesday, in advance of appearing before the finance committee next week.

A spokeswoman for the Central Bank said more than two million accounts had been examined, covering all mortgage lenders who sold tracker mortgages.

Enforcement actions

It has already begun or concluded enforcement actions against Springboard, which was fined €4.5 million, Ulster Bank and PTSB. It is understood more enforcement actions could be announced.

Mr McGuinness said the banks involved should face consequences of “equal gravity” as the effect on those affected by the controversy, such as having their banking licences restricted. When banks were called before the committee, Mr McGuinness said KBC, in particular, “sat there and said nothing”.

“The only one who can sanction them is the Central Bank and nobody will be happy until that happens,” he said. Sanctions should also be accompanied by full compensation, with interest, to the customers involved, he added.

Government and Fianna Fáil sources said they would await next week’s report and committee hearing before deciding the next step.

Taoiseach Leo Varadkar yesterday said: "Any banks, whether they are partially owned by the State or not, [that] took people off tracker mortgages incorrectly should put that right and they should repay what is owed."

Financial advisor Padraic Kissane, who has been instrumental in shining a spotlight on the issue, claimed up to 30,000 homeowners may have been wrongly removed from trackers but added the possibility that financial institutions facing legal action as a result of the scandal is remote.