Minister for Finance should not regulate Central Bank, says Tánaiste

The Minister for Finance should not regulate the Central Bank, Tánaiste Joan Burton told the Dáil yesterday.

“This is what led us down the road of difficulty in the past,” she said.

She said the consumer side of the regulatory structure certainly needed to be improved, and the Central Bank was undertaking an examination of that area.

“Today marks the first day in office of the new governor of the Central Bank, who is properly independent in the exercise of his functions to protect the system and customers,” she added.

The Tánaiste was replying to Fianna Fáil finance spokesman Michael McGrath, who said a recent RTÉ Prime Time programme had exposed the scandal of banks denying mortgage customers of their contractual right to return to a tracker rate following a period of time on a fixed or variable rate.

Internal appeal systems

“Customers have been forced to go through the banks’ own internal appeal systems, the Financial Services Ombudsman, the Central Bank and the courts system to vindicate their rights,” he added.

“If they finally win the argument to be returned to a tracker, many of them are not being given the original rate but a much-inflated one which is sometimes between 3 per cent and 4 per cent higher than the original rate.”

Mr McGrath said up to 300,000 variable-rate mortgage customers were being ripped off by their banks.

“We have known for some time that in some cases banks are determined to do whatever it takes to get people off tracker mortgage rates,” he added. He said the Government needed to talk the language banks understood when breaching the consumer code of contact.