# Central Bank's update just published



## Brendan Burgess (17 Oct 2017)

*Highlights(my selection) 
*

Approximately 13,000 impacted accounts have been identified by lenders as at end
September, an increase of 3,100 since the March Report. Approximately 60% of impacted
accounts arise as a result of customers not receiving tracker products and approximately 40%
of impacted accounts arise from customers not receiving correct tracker margins.

To date lenders have reported
that as a result of their failings, loss of ownership has occurred in respect of 23 private
dwelling homes and 79 buy to let properties. As lenders’ analyses continue, this figure will
rise.

Similarly, lenders’ overall reviews are subject to ongoing assurance work and vigorous
challenge by the Central Bank. Accordingly, it is possible that additional impacted accounts
may be identified as the Examination continues to progress.

The Central Bank, with the assistance of its panel of experts, is evaluating the Phase 2 Reports
submitted by lenders. The primary focus of this ongoing assurance work is on customers
whom lenders have deemed not impacted and involves challenging the findings of lenders’
reviews through robust engagement in the form of on-site inspections, the review of relevant
materials and a substantial number of meetings with lenders.

While assurance work is ongoing in a number of lenders, from the assurance work completed
to date, the Central Bank is concerned that two lenders may have failed to identify
populations of impacted customer or failed to recognise that certain customers have been
impacted by their failures. The Central Bank is of the view that certain of these customers are
in fact impacted and accordingly entitled to redress and compensation. As a result of the
Central Bank’s challenges, the two lenders are reconsidering certain outcomes from their
reviews and are due to revert to the Central Bank by end October 2017. As the Central Bank
progresses its assurance work, other lenders will be similarly challenged.


Most lenders have now commenced engagement with the customers they have identified as
impacted. As at end September, lenders have rectified the interest rates applied to
approximately 7,700 impacted accounts, an increase of approximately 1,400 accounts since
the March Report, which represents 98% of customers identified by lenders as impacted to
date who require rate rectification.

A key objective of the Tracker Examination is to ensure that customers who are identified as
impacted receive redress and compensation from lenders as early as possible. However,
lenders’ initial redress and compensation proposals fell short of the Central Bank’s
expectations. Examples of material deficiencies included:
- failing to offer compensation for certain impacted cohorts of customers;
- unacceptably low offers of compensation;
- unacceptably low payments for independent advice; and
- failure to acknowledge certain types of detriment sustained by impacted customers,
including customers who switched lenders as a result of being on the incorrect interest
rate, for compensation purposes.

These material deficiencies necessitated the Central Bank to challenge lenders repeatedly to
improve their proposals, and has resulted in lenders significantly improving both their redress
and compensation proposals and their appeals processes, to the benefit of impacted
customers.

To end September 2017, €120 million has been provided to customers (approximately 3,300
accounts) pursuant to the Examination. This is in addition to redress and compensation
provided by permanent tsb plc (€36.8 million) and Springboard Mortgages Limited (€6.2
million) to customers pursuant to their Mortgage Redress Programme (MRP), which was
required by the Central Bank and predated the Examination. Accordingly from July 2015 to
end September 2017, the aggregate figure for redress and compensation to customers arising
from the MRP and the Examination is €163 million.

The Central Bank does not have the statutory power to compel lenders to implement redress
and compensation programmes in respect of failures that occurred prior to the introduction
of the Central Bank (Supervision and Enforcement) Act, 2013 on 1 August 2013. As a result,
the Central Bank cannot require that lenders implement a uniform framework for redress and
compensation across all lenders.

Three lenders have now established appeals processes for customers
who have received redress and compensation offers as part of the Examination process. The
Central Bank continues to engage with the remaining lenders regarding the setting up of their
appeals processes.

Enforcement
The Central Bank concluded an enforcement investigation in respect of tracker mortgagerelated

failures identified at Springboard Mortgages Limited on 24 November 2016 and
imposed a monetary penalty of €4.5
million on the firm in respect of those failures.

The Central Bank is currently pursuing enforcement investigations in relation to tracker
mortgage-related issues arising in permanent tsb plc and Ulster Bank Ireland DAC. Two further
enforcement investigations into other lenders are in train, and it is anticipated that more
enforcement investigations will follow. Enforcement investigations are informed by evidence
obtained and gathered as part of the Examination. Enforcement investigations are detailed
and forensic and involve the scrutiny of large volumes of documentation and interviews with
relevant individuals.


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## SaySomething (17 Oct 2017)

Only 700 more accounts have been redressed since the last Central Bank update in March 2017.
13,000 identified accounts.
3,300 have received redress.
9,700 still awaiting redress.
Wow.


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## Brendan Burgess (17 Oct 2017)

This is the bit which I most wondered about : 

However,
lenders’ initial redress and compensation proposals fell short of the Central Bank’s
expectations. Examples of material deficiencies included:
- failing to offer compensation for certain impacted cohorts of customers;
- unacceptably low offers of compensation;
- unacceptably low payments for independent advice; and
- failure to acknowledge certain types of detriment sustained by impacted customers,
including customers who switched lenders as a result of being on the incorrect interest
rate, for compensation purposes.

These material deficiencies necessitated the Central Bank to challenge lenders repeatedly to
improve their proposals, and has resulted in lenders significantly improving both their redress
and compensation proposals and their appeals processes, to the benefit of impacted
customers.


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## SaySomething (17 Oct 2017)

Irish Times coverage https://www.irishtimes.com/business...-of-customers-have-received-redress-1.3259111


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## skinnylegs (17 Oct 2017)

Are the Central Bank stating that if a "failure" occurred before 1st Aug 2013 then there is nothing that can be done for you under current legislation? Or do they mean redress and compensation will only be calculated from that date if you are deemed impacted?


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## justo (17 Oct 2017)

skinnylegs said:


> Are the Central Bank stating that if a "failure" occurred before 1st Aug 2013 then there is nothing that can be done for you under current legislation? Or do they mean redress and compensation will only be calculated from that date if you are deemed impacted?


 
The former


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## skinnylegs (17 Oct 2017)

But if almost all of the thievery happened pre August 2013, what is the point of this whole examination?


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## SaySomething (17 Oct 2017)

skinnylegs said:


> Are the Central Bank stating that if a "failure" occurred before 1st Aug 2013 then there is nothing that can be done for you under current legislation? Or do they mean redress and compensation will only be calculated from that date if you are deemed impacted?


Doesn't mean you're not entitled to reinstatement. It's amongst the suggested questions to be put to the Central Bank on Thursday.


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## MsBinky (17 Oct 2017)

Have been redressed as impacted but preparing an appeal through a third party at the moment for a loss of property  (investment ). This bank aren't aware yet of the appeal. 

Wonder where the figure of 100 lost properties has been arrived at? impossible with the very general information provided by the Central Bank to get a handle on the real figure or indeed any real comfort for those not yet even contacted. 

Hopefully the CB will be more lender specific when in front of the committee. 

Disgraceful that so many still waiting for answers


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## skinnylegs (17 Oct 2017)

Thanks Saysomething


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## Thomas (17 Oct 2017)

Slightly positive that it specifically mentions swtichers as an issue but silence on the "prevailing rate"/"artificial margin rate" is not encouraging - hopefully the Finance Committee will get some answers on this area.


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## SaySomething (17 Oct 2017)

€42 million of redress & compensation since March to 700 customers is an average of €60,000 per customer. Granted some would have been lower and some higher but that is a life changing sum of money.
It is all so vague.
They say that they hope that redress and compensation will be commenced by most banks by the end of the year. Like we should be grateful for that. 
Seriously.
That's not acceptable. 

It's been over 7 years since the bank refused us our tracker mortgage. For others it is far longer. 
Over 8 months since they returned us to our tracker rate but still hold us responsible for the mischarge accrued while we were in MARP.
My bank ADMITTED to me on the phone in January of this year that my calculations were correct but that I had to wait to get the account redressed along with all their other customers. They know how to work out the figures. 
Redress has to be done first. This is ridiculous.
In the background I'm battling with my bank on a number of other issues directly related to their incompetence. 

Who is going to hold them to account, because the Central Bank certainly won't.
"Oh, so you want to delay the submission of your Phase 2 report, due in September 2016, until you're ready? Ah sure the following year is grand."


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## Eamon Sweeney (17 Oct 2017)

So if lost my original tracker rate in Dec 2008 after coming off a 3 year fixed rate (AIB defence - they discontinued offering Trackers in Oct 2008) I shouldnt be getting any hopes up for either redress or compensation?


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## SaySomething (17 Oct 2017)

Eamon Sweeney said:


> So if lost my original tracker rate in Dec 2008 after coming off a 3 year fixed rate (AIB defence - they discontinued offering Trackers in Oct 2008) I shouldnt be getting any hopes up for either redress or compensation?


You should get both, in the bank's own sweet time, providing you meet the criteria. The Central Bank just can't direct the bank to fix it for you, but the bank is expected to honour the examination process.


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## Jespie1 (17 Oct 2017)

skinnylegs said:


> Are the Central Bank stating that if a "failure" occurred before 1st Aug 2013 then there is nothing that can be done for you under current legislation? Or do they mean redress and compensation will only be calculated from that date if you are deemed impacted?


. So does this mean the overpayment made between (for me in this instance)2010 and 2013. Won't be refunded. That can't be right


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## SaySomething (17 Oct 2017)

@Jespie1 it will be refunded. Just the Central Bank can't direct the banks to do it within a certain timeframe. See the comment above.


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## moneymakeover (17 Oct 2017)

@Eamon Sweeney are you assuming you will be returned to tracker?
That's a given?


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## Stitcher (17 Oct 2017)

I am confused by the statement that 98% of customers (7700) identified by banks to date as requiring a rate rectification have had their rate rectified (Nearly every one!,)

Does that mean they got their original rate back or a different tracker rate?  Did any ptsb customers get their original rates back (I know some other banks have given back the correct rates).


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## Eamon Sweeney (17 Oct 2017)

What do you mean by meeting the criteria


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## moneymakeover (17 Oct 2017)

Pdf document from the website
https://www.centralbank.ie/docs/def...cker-issues/update-on-tracker-examination.pdf


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## SaySomething (18 Oct 2017)

Absolutely outstanding Op-Ed in the Irish Times today along with hard hitting editorial from Ciaran Hancock. Really, really excellent coverage of the debacle getting to the nub of the issue.


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## Lightening (18 Oct 2017)

"The only disappointment is that the Central Bank hasn’t named and shamed the lenders in its latest report. Why not?"

Good question!

I'm guessing (not so difficult) the two banks who are being sent to the naughty corner for not doing their home work properly are KBC and BOI but this has not been stated. Is it going to take another two years to get answers regarding affected cohorts in these banks? Padraic has confirmed all the cohorts in KBC and all of these should be immediately reinstated to Tracker.

Why is there a lid being kept on them by the CB

Why is this being shrouded in secrecy? 

It's not fair to keep people waiting it is causing more pain and stress to thousands waiting an outcome.


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## SaySomething (18 Oct 2017)

@Lightening The CB has given those 2 banks (whoever they are, cough) until the end of October to revert with their new proposals. Is that October this year or next year though?


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## Lightening (18 Oct 2017)

Sounds simple; there are at least 7 cohorts in KBC affected and a few days left in October 2017. I can imagine this is how it will be;

(Mr Lane )"Mr Verbraeken how many cohorts do you think you will to put back on Tracker"

(Mr Verbraeken) " eh let me see, one?"

(Mr Lane) " eh do you not think that's a bit mean" 

(Me Verbraeken) " ok then How about two?

(Mr Lane) " grand job" we will go with that !


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## SaySomething (18 Oct 2017)

From Christina Finn - Political Reporter for The Journal on Twitter.

Pascal Donohoe is calling in the heads of the banks on Monday and Tuesday to "admonish" them on their behaviour with the tracker mortgage scandal.

From myself, parent to 3, giving out to the children achieves nothing. In order to prevent further infractions you need to incentivise good behaviour and penalise bad behaviour.


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## peemac (18 Oct 2017)

Leo Varadkar getting involved too and willing to give CB additional powers if needed.
http://www.independent.ie/irish-new...dalous-tracker-mortgage-scandal-36239522.html

CB can't name the banks as its an ongoing investigation and enforcement action may yet be taken - considering the banks have the best legal eagles at their disposal, anything that would affect any action will be out of public domain. 

I'd rather not to have names named and ensure that maximum penalties and redress are put on the banks. In any case we can guess the "two".


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## Delboy (18 Oct 2017)

SaySomething said:


> From Christina Finn - Political Reporter for The Journal on Twitter.
> 
> Pascal Donohoe is calling in the heads of the banks on Monday and Tuesday to "admonish" them on their behaviour with the tracker mortgage scandal.
> 
> From myself, parent to 3, giving out to the children achieves nothing. In order to prevent further infractions you need to incentivise good behaviour and penalise bad behaviour.


FG have form on calling in the Banks heads
http://www.independent.ie/business/...t-mortgage-interest-rates-again-34729537.html


> Michael Noonan says he will call in the heads of all of the main banks to apply pressure to cut mortgage interest rates again, but stood over claims a move to legally force down prices could be unconstitutional.


All about the optics


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## Tedtalk (18 Oct 2017)

This isn't optics this time. My bet is Michael McGrath is driving this one behind the scenes


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## Wardy7 (30 Nov 2017)

When is the next Central Bank update due to be published?


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## SaySomething (30 Nov 2017)

Wardy7 said:


> When is the next Central Bank update due to be published?


Mid December. 15th at the latest I believe.


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## JCB1 (5 Dec 2017)

Where has all media coverage gone? I'm at my wits end with this fiasco 
What are ministers/government doing about it? 
Can someone post email address for pascal Donohoe


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