# The Central Bank was never a friend of the mortgage holder



## kb_whatsgoingon (18 Feb 2019)

I think its an important take from these articles that the CBI was never a friend to the irish mortgage holder - only by pressurising TDs etc did the CBI do anything - even though what the banks did was so obviously wrong the CBI did nothing 
there is something very disturbing about this -


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## Zebedee (18 Feb 2019)

The problem is that the CBI is trying to serve two masters ie the consumer side and prudential side. Acting in favour of the customer puts pressure on bank margins which (in the extreme) leads to bank solvency problems (and vice versa). Given our banking history the consumer side is never going to put a proper squeeze on the banks. Hence the recent washing of hands on the redress side. You’ll never hear the consumer side suggesting a cap on mortgage rates (as suggested by various TDS). 

So whatever hope we have of the CCPC taking action, the probability of the CBI doing anything serious is more remote.


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## Jim2007 (18 Feb 2019)

kb_whatsgoingon said:


> I think its an important take from these articles that the CBI was never a friend to the irish mortgage holder - only by pressurising TDs etc did the CBI do anything - even though what the banks did was so obviously wrong the CBI did nothing
> there is something very disturbing about this -



It is not the job of the CBI to be the friend of the mortgage holder nor anyone else, it is there to act independently.


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## Gordon Gekko (18 Feb 2019)

The CBI is utterly conflicted; fair treatment for consumers damages the balance sheets of the banks.

They have also disgraced themselves over the course of the Brexit debacle; tales of non-responsiveness and Civil Service style procrastination are rife amongst the advisor community and it’s costing Ireland Inc dearly.

The sad truth is that organisations like the CBI are where idiots and jobsworths go when they can’t hack the private sector.


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## newtothis (18 Feb 2019)

Jim2007 said:


> It is not the job of the CBI to be the friend of the mortgage holder nor anyone else, it is there to act independently.



It is, actually. According to themselves "As the regulator of financial service providers and markets in Ireland, the Central Bank has to ensure that the best interests of consumers are protected."

As others have pointed out, it is utterly conflicted in its other role: "The Central Bank has an explicit mandate in domestic and European legislation to contribute to financial stability in Ireland and at euro area and EU levels." and "The Central Bank aims to ensure that regulated firms are financially sound and safely managed.".


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## kb_whatsgoingon (18 Feb 2019)

So i read in another thread on here that in France for example the consumer protection agency monitors variable rates and no bank/lending institute can charge a customer more than e.g 2.4%

Compare that to here where the variable rates went through the roof after the recession - it took a lot to get them to pull them back - and when they did no one saw a problem - no one got refunds ? I think PTSB went up to 7% at that time ??

Then low and behold the banks start doing well and* offered new customers cashback and lower interest rates *- i mean wow how sickened I was by that.


I was trapped with a negative equity mortgage so I could not move so I had to suck it up and then knew it - some use the CBI and the consumer protection agency and the Ombudsman were then

today I have a loan contract with EBS and I can't for the life of me understand how the CBI - who apparently Regulate this bank (?) could stand over this document – they have the opportunity both right now to look into it ( to date they have failed to make reference to the very ambigous terminology in it )and it begs the question what kind of regulation where they actually doing back in 2008


Really there should be an investigate into the CBI, not for this just this but the failure of them leading up to the banks’ collapsing – is this an organisation that is fit for purpose?


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## RETIRED2017 (18 Feb 2019)

The present day CBI are doing a good job ,you only have to look at this site over the last month or two to see there requirement of banks to notify there mortgage customers of the best  interest rates  is working very well, lots of mortgage holders are now checking to see are they on the best rate thanks to the CBI requirement,


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## elacsaplau (18 Feb 2019)

Just to add my vote regarding the absolute ineptitude of the Central Bank


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## RETIRED2017 (18 Feb 2019)

kb_whatsgoingon said:


> Jim2007
> 
> Not a friend to the Irish mortgage holder is the understatement of the day - people held contracts with banks and the banks simply did not honour those contracts  - in fact they worked around' the terms and conditions set out in those contracts as it pleased them - and the CBI DID NOTHING for the best part of at least 6 years
> 
> ...


You will have to wait and see if the people heading for the High Court get treated better in the Courts than by the CBI,


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## kb_whatsgoingon (18 Feb 2019)

Retired 2017 - Thats the whole point - they should not have to go to the high court in the first place - if the banks had been properly regulated in the first place, and again now as they fight tooth and nail to deny these mortgage holders, while they talk out the otherside of their mouths about how they are so sorry about doing the wrong thing back in the day and now they are working very hard trying to right that wrong-- YEAH right 

in this case with AIB if they are so sure they are right why were they so underhanded about how they went about it -- they did not tell people what they were up to ? they bascially effected a change of terms to a contract they had signed up to with 6000 people and never discussed it with anyone of them - ? sure sound real dodge to me? and i'm not very bright to be honest 

so wheres the regulation?

no really instead of regulation and proper management of this madness......6000 suckers are supposed to organise themselves off to the massively expensive high court -? i
isn't this supposed to be a civil society we live in .... this is acceptable behaviour of our so named pillar banks........what a joke and thats why we pay taxes ????????


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## kopkidda (19 Feb 2019)

The Central Bank really have come across as very unprofessional in all of this, yes they have helped to get some people into the redress scheme but they have stopped short of dealing with the matter as is their mandate.

They regulate the market and the banks and should of therefore regulated that in the case of "the prevailing rate cohort" AIB have broken contract law and therefore any judgement comes down on the side of the consumer.

To me it appears that AIB have left their biggest problem until the end, 6000 customers is a hell of a lot of people to get proper redress!!!


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## peemac (19 Feb 2019)

kb_whatsgoingon said:


> So i read in another thread on here that in France for example the consumer protection agency monitors variable rates and no bank/lending institute can charge a customer more than e.g 2.4%
> 
> Compare that to here where the variable rates went through the roof after the recession - it took a lot to get them to pull them back - and when they did no one saw a problem - no one got refunds ? I think PTSB went up to 7% at that time ??
> 
> Then low and behold the banks start doing well and* offered new customers cashback and lower interest rates *- i mean wow how sickened I was by that.


But look at France. It did not have a financial crisis like we did and banks there could borrow at ECB rates and raise bonds close to ECB rates, so because their cost of funds were nowhere near what Irish banks had to pay for a couple of year they were well able to keep rates down.

Then look at how non payers are treated in France. You'd be VERY lucky to be still in your house 6 months after non payment and it would cost the bank very little to repossess.

Then you look at the deposit needed in France 20% minimum and more often than not 25%. The legal costs of property purchase in France are enormous. You would not see change from €10k. Then you have the mortgage term. 20 years max except in exceptional circumstances. And then the lending cap - if you think CBI rules are strict, in France ALL your lending repayments cannot exceed 30% of your net income. So a homeowner buying a property worth 250,000 in France in reality has to have at least 60k and virtually no other borrowings, and if you've that much invested in a property, you will not take a risk in losing it 

So a French bank has virtually zero risk yet are still charging 1.6%. That's a very healthy profit margin considering they can borrow at 0% and probably higher than the net margin Irish banks have.


As for the CBI. Like any institution or company, the head person dictates the style of "trading". Up until Phillip Lane came in, it was always banking people running the central bank and they were very indoctrinated into the "system" they worked in. Suddenly an unknown comes in that does not come from within the inner circle and all hell breaks loose - if you are a bank.

For the consumer, finally the hold the inner circle had on the institution that is the CB was broken and the results are now there for all to see.

the CBI can't be just a consumer champion - it has to straddle both sides. You won't be happy with every decision made or every policy implemented, but its the same for the banks - they have finally had to up their game.


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