Varadkar says taxpayer will not foot the bill of tracker scandal compensation

Fianna Fáil says Central Bank should devote more resources to investigating the issue

Michael McGrath said a timeline should be imposed on the banks to ensure customers have their money returned before Christmas. Photograph: Gareth Chaney Collins

Michael McGrath said a timeline should be imposed on the banks to ensure customers have their money returned before Christmas. Photograph: Gareth Chaney Collins

 

Taoiseach Leo Varadkar has insisted the taxpayer will not have to foot the bill for the compensation of those wrongly moved off tracker mortgages.

Speaking on Monday morning, Mr Varadkar said Minister for Finance Paschal Donohoe will meet with the banks this week and he expected action to follow.

Mr Varadkar said: “The banks have it in their hands to resolve this in a matter of weeks or months if they want to do so.

“I would hope that after their meetings this week they will do want to do so.”

The Government had threatened a series of actions against the banks if they fail to compensate those affected by Christmas.

Measures include an increase in taxation or an increased bank levy.

Mr Varadkar said those affected are the Government’s priority and is seeking a commitment from the banks to restore customers to the right interest rate and to compensation.

He added: “People have heard our language, they want to see action and as a Goverment we want to see action from the banks and if we don’t see action there will be action from the Government.”

Timeline

Meanwhile, Fianna Fáil’s finance spokesman Michael McGrath has said the Central Bank should devote more resources to investigating the scandal.

Mr McGrath called on former bank staff to come forward and report what they observed in the tracker mortgage scandal.

He also said a timeline should be imposed on the banks to ensure customers have their money returned before Christmas.

He pointed out that AIB has refunded 97 per cent of their customers impacted by the tracker mortgage scandal.

“If some banks can do it, they all can,” he told RTE’s Morning Ireland.

As many as 20,000 homeowners have potentially been caught up in the scandal which saw banks forcing people off loss-making tracker mortgages in the post-crash period.

Mr McGrath said that the foot dragging approach of the banks was self defeating and it was for time for them to get on with it.

He said the Government could introduce legislation to allow class actions, where groups of customers could take legal action against the banks.

He also called on the Government to use its shares in some banks to force votes at AGMs.

The Central Bank has 26 staff working on the issue while Ulster Bank has more than 200 staff working to clear up the problem.

“The Central Bank needs to put more resources into tackling the problem.

“The State’s sole role should be looking after customers.”

Mr McGrath added that penalties were not a solution as the banks would just pass on the cost to variable rate mortgage customers who are already paying over the odds compared to other European countries.

Repayment

Meanwhile, Fine Gael Senator Kieran O’Donnell said there is no reason why the banks cannot repay the money owed to tracker mortgage customers by the end of the year.

“Everything is on the table,” he told RTE’s Morning Ireland with regards to the Government’s attitude to the banks.

“If the process does not start then I expect the Government will take whatever steps are necessary.”

Senator O’Donnell, who is a member of the Oireachtas Finance Committee, said there is a range of actions open to the Government including legislation, sanctions and taxation, but he hoped it would not come to that.

He predicted that the Minister for Finance will tell the banks to get on with paying back the money taken from customers on tracker mortgages.

“There is no reason why they cannot proceed to pay back what is these people’s own money.

“The Minister will be making the Government’s views known plainly. He will want to know what will be paid and when it will be paid.

“Nothing less will be acceptable. The key focus is that victims get their money back as soon as possible.”

The financial adviser Padraic Kissane, who was one of the first to highlight the tracker mortgage scandal, says there has to be a change in attitude in the banks from the top down.

He also expressed concern about the legal advice being given to the banks and told RTÉ’s Morning Ireland that there is a moral issue that needs to be addressed.

“You hear that banks can approve a loan in two hours, but they can’t take that time to send out a redress letter.”

The “attitude” of the banks is the reason why they have gotten away with the scandal of tracker mortgages, said Mr Kissane.

He called on the Minister for Finance to use his powers as a shareholder in the banks when he meets with them later today and tomorrow.

“He owns a lot so he can dictate. He can tell them. That’s a good place to start.

“There has to be a huge shift in the attitude of the banks.”

The financial adviser said if the banks “get on board,”’ the issue can be resolved quickly.