# You can watch the Central Bank at the Oireachtas Finance Committee now



## Brendan Burgess (19 Oct 2017)

They will be in Committee Room 2 at 9.30 am 

http://www.oireachtas.ie/parliament/watchlisten/watchlive/committeeroom2/


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## Brendan Burgess (19 Oct 2017)

Starting now.   - Tracker issue first and then other issues

Philip Lane - Governor
Derville Rowland - Director General for Financial Conduct - including consumer protection
Ed Sibley Deputy Governor - prudential regulation
Sharon Donnnery - Deputy Governor -


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## Brendan Burgess (19 Oct 2017)

All lenders did not recognise problems until we intervened.

We had to use the limits of our powers to get them to comply.

If they had followed our guidelines, they would be further along now. 

As part of Phase 2, they must identify those "in scope but not impacted"  (I wasn't aware of this distinction, but it makes sense.) 

Category of detriment ranges from the wrong tracker rate up to losing a property. 


A causation analysis must be carried out when loss of ownership happened.


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## Brendan Burgess (19 Oct 2017)

"We are getting communication directly from affected customers which informs our investigation."


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## Brendan Burgess (19 Oct 2017)

We are challenging two lenders on their categorisation of people as not affected.  We expect to challenge others in due course.


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## Brendan Burgess (19 Oct 2017)

We don't have the power to impose redress and compensation for events which happened before 2013. 

But we have made our expectations clear 

But the initial proposals were not always acceptable.

Failing to offer compensation 
Low offers compensation 
Low payments for independent advice 
Failure to recognise ... including those who switched lenders


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## Wardy7 (19 Oct 2017)

Now I know a presentation is a presentation.....but come on.....nothing in that opening statement that we didn't already know!!!


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## Brendan Burgess (19 Oct 2017)

*McGuinness *
The limits of your powers? Would you like to comment? Do you want more powers?

*Lane*
The legislation in August 2013 was not retrospective
We have power for any events since then, but not for any trackers as they happened before that.
So any new powers would not help.

We did have the power to produce the reports. But the compensation is from our moral suasion - We told them: "You are better off doing this on a voluntary basis, or else you will be dealing with the FSO and the courts"

*Rowland: *We developed our approach from the ptsb investigation.  We have a lot of powers.  We have used the 2013 act for information gathering purposes.

An enormous exercise - 2 million accounts. (How is there 2m? No wonder it's taking so long.)

Phase 2 deadlines have been met, but we weren't always happy with the results.

Dealing with the impact on people at the end of the process was the wrong way around.

Repossessions of those affected were put on hold in case they were contaminated.

We demanded that any time bar issues would be put in abeyance.

We have a full suite of enforcement powers which have been challenged in the courts 5 times.

We have encouraged the banks to put consumer protection at the heart of their culture - irrespective of the legal requirements.

To propose that there would be no appeal is unacceptable.


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## Brendan Burgess (19 Oct 2017)

*The disagreement has reached an impasse with some lenders. *

We have the power to tell them to  identify by name the people and to write to them telling them their rights. 

We have spoken to the FSO so that the 6 year time limit won't apply. 

We have redress powers. But we don't have compensation powers.


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## Brendan Burgess (19 Oct 2017)

Pearse Doherty

Given that they are being overcharged at present, do you not have the powers under the 2013 Act do deal with them. (Great question.)

Rowland
Some timing issues
Rate rectification - those who have been identified, rate rectification has occurred in 98% of cases.
Others who no longer have a tracker...

Pearse:
You are in dispute with two banks about the inclusion of some cohorts - so do you not have the powers to impose a solution on them.

Rowland:

We would have to resolve that dispute. We would have to have it out on a factual legal basis.  This would have to be resolved by the law.

Pearse: Can you name the two lenders?

Rowland: There is no power to order compensation in the 2013 act. We do have the power of redress, but that would be subject to the issue being legally resolved.

But we have to fully crystallise the dispute.

Lane:
If the banks say "We are in line with our contracts" we try to persuade them, rather than go into legal issues with them.

We can't say "We believe this, so therefore you must immediately change your policy. In most cases, the banks do concede to our views. It will be quicker if they agree."

Pearse
I am shocked that you tell us that you think some people are affected,but that the lender disagrees so all you can do is tell them to go to the Ombudsman.

Lane
The current strategy is delivering for the vast majority of customers. If we focused in on the post 2013, people would lose out between 2008 and 2013.

It has worked for most lenders. It will work for some others. We will have a few where we don't agree.

We have pushed back on many occasions, and have succeeded in persuading the lenders to our point of view.

Pearse: How many individuals are in those two banks

Lane: Significant.  We can't give too much guidance.

Pearse: Is it in the hundreds or the thousands?

(Yet again the phones are interfering with the sound. Why don't they just tell them all to completely switch off their phones? update: turned out to be Lane's iPad.)

Lane: We are governed by confidentiality rules.   When we agree a sanction, we do publish it.  The banks can disclose, but we can't.


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## Brendan Burgess (19 Oct 2017)

Michael McGrath:

When will this nightmare end?

Lane: Some are almost completed.  Others have started.  Appeals Panels have to be set up yet.

There will be a long tail as some will go to the Ombudsman or the Court

In the cases where they are deemed not in scope, they will go on for a long time.

Lane: A lot will happen before the end of the year and the first quarter of 2018

McGrath: At what level are you dealing with in the banks?

Lane: At all levels. Ed meets the CEOs and Chairs , typically on a quarterly basis and we always raise this issue.

Rowland: There is extensive legal engagement directly and sometimes we receive ghost letters i.e. those written by outside firms.
The lenders are very well advised.

McGrath: So it has become a very legalistic obligation

Lane: There will be areas of ambiguity.  the original contract, ads, broker communication.
(phones still interuupting it. - it's Lane's iPad.)

They sometimes had a narrow view of who had been affected.
They had low compensation.

McGrath
How many of the 15 lenders have affected customers
Lane: 11 - the others didn't offer trackers.

McGrath: I don't believe that this was an accident. Are you going to find out how this happened?

Lane: Culture - There is a common culture across the banks to interpret an ambiguous contract in the bank's favour.
Given the movement in interest rates, the economic incentive was great

So there are common factors - they were in a similar situation.

Rowland: In each of the enforcement investigations,we will be looking to see if rules were breached.  We will need to interview executives. We will examine board minutes.

Lane: Have you found any evidence to report stuff to Gardai or have you had to invoke the Fitness and Probity.

Rowland: Fitness and Probity can only apply if people are still working in banking.

We have met the Gardai and other agencies.  But we have made no formal reports under Section 33 AK.

McGrath
What is the advice to people who feel they have been affected who have not heard from the bank?

Rowland: Good question. They should make a complaint to the lender as the lender is obliged to write back. Plese encourage your constituents.


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## Lightening (19 Oct 2017)

Missed the bit about the brokers, marketing material, communications etc! His iPad was on! 

Anyone get that?


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## Wardy7 (19 Oct 2017)

You got it.....nothing really to add!


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## Brendan Burgess (19 Oct 2017)

McGrath

The prevailing rate of AIB 3.67% and ptsb 3.25% ? If the bank determines that they were affected, but put on the high rate.

Is that a live issue for you with AIB and ptsb?

Lane: We can't name. In general, these issues are fully within what we are looking at.

Regardless of what the banks decide, those affected can go to the Ombudsman or the Courts Service.

McGrath: Is that issue in scope 

Lane: Absolutely is something we are looking at. 

McGrath: two lenders have not identified cohorts as being affected
Can you give us examples? 

Lane: Two levels 
1) When did you take out the tracker?  Was it april 2006 or May 2007? The bank says that there is no issue. WE say that they are.  (Sounds like the AIB pre 2006). And could include scenarios where people have switched lender.


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## Gavin77 (19 Oct 2017)

I'm sorry for asking what some may think is a silly question but I don't understand.
If they have no power pre 2013... which was when most of the damage was done... how can they refer you back to ombudsman that already said no to you. I'm hoping I got it wrong as that couldn't make sence can anyone enlighten me???


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## Wardy7 (19 Oct 2017)

They have no power dating back but they are "encouraging" banks to look again. I assume that will apply to FSO too?


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## Brendan Burgess (19 Oct 2017)

Senator Rose Conway Walsh

What about people who were told that they were not in scope.

Rowland: They should write a letter of complaint.

Lane: Everything is starting from new. Even if they got that letter in the past, they should complain again.

Rowland: How many people do you have working on this? 

Lane: 26 + our own advisors


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## Brendan Burgess (19 Oct 2017)

Rowland 

We look at everything, including ads on TV at the time.


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## Lightening (19 Oct 2017)

I hope we can get the notes on all this info on fraud at a later stage system is down! What timing!


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## Brendan Burgess (19 Oct 2017)

Lane (In answer to yet another question from Paul Murphy on collusion between the different banks.) 

Even if there had been zero interaction, they faced the same common problems, so they would have done the same thing.


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## Brendan Burgess (19 Oct 2017)

Murphy: How many people 

Lane: 7,100 in previous cases.
13,000 in this review so far.

But there will be substantially more.


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## Brendan Burgess (19 Oct 2017)

Guys - please use this thread for documenting what is said. Not for your general expressions of frustration. 

Thanks


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## Brendan Burgess (19 Oct 2017)

Rowland

We are at the crystalisation stage now. We will have to move on to the next stage i.e. telling them to write to their customers telling them that they are not affected. 

Brendan


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## Lightening (19 Oct 2017)

Those two banks  (we all know who they are )to come back to CB by the end of the month
Derval
"change of mind (by the banks) is the best procedure
Change your mind or move on (so those customers in these banks that are impacted are being forced to go to the Ombudsman/court)
we are going to press hard on that, as short a time frame as possible"

Two institutions  suggested as BOI and KBC. Lane will not confirm they are the two being discussed.

The CB has the power to bring a legal case but confirm its a lengthy process they are asking the bank to write to each individual those the banks claim are not impacted it is therefore up to the customers to go the Ombudsman or court (so in other words CB doing nothing even though they are aware all these people are impacted) 
--
That is not a fair process for those thousands of people involved with these two banks deemed impacted by the Central Bank.

I was under the impression the CENTRAL BANK that had the FINAL SAY here not these two banks!  

Then she goes on she realizes the difficulty of going to court and mentions a supreme court decision previous (enforcement case).


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## Brendan Burgess (19 Oct 2017)

Suspended until 2 pm.


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## Lightening (19 Oct 2017)

Mr. McGuinness doesn't have faith in that bank (KBC) that blanked brazenly the Irish Parliament in the Oireactas recently  !

Im afraid the CB have failed the customers of these two banks. 

Mr. Lane mentions "many customers' will receive redress and compensation, but it is clear he has no intention of doing anything about those customers that the CB deem impacted by these two banks (BOI and KBC).

The Cb has told them  just to "relook' before the end of the month maybe they will change their mind.

OMG I'm pulling my hair out!!!


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## elbo (19 Oct 2017)

lunch time now, feel like I've just wasted my morning watching this, yes its drawing it all out, yes they are "dealing" with the issues, me, I'm an affected customer, I'm still none the wiser on my case.  My bank balance is the miserable same as it was this morning. 

My issue is the prevailing rate, and while they admitted it is in the scope of the investigation, its most likely to be a FSO and Courts matter, none of which I have the strength or endurance for anymore, the central bank are still failing ..........


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## Banking17 (19 Oct 2017)

Are they coming back


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## Brendan Burgess (19 Oct 2017)

They are back now.

Pearse starts it...

How much will this cost? I estimate it will be around €300m?

Lane: That is a reasonable estimate

Pearse: If we closed our lives, we could think that it's Patrick Neary before us.

Governor Lane, the banks are taking a hand to ye.  Because you are a dog which refuses to bark, never mind bite.


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## Banking17 (19 Oct 2017)

P Doherty very informed. 

Date for Phase 2 was moved long time ago from 2016 to Sep 2017


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## Brendan Burgess (19 Oct 2017)

Pearse: I spoke to someone who was repossessed in January 2016 and he is now being told that he is in the review. The property is lying empty.   That flies in the face of what you have told us.

Rowland: That should not have happened.

Pearse: Maybe our expectations are too high, but if you need additional powers, we will give them to you.

Rowland: The examination is completely separate from the enforcement. The enforcement investigations will follow their own peculiar... particular path.


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## Brendan Burgess (19 Oct 2017)

McGrath: Have any of the institutions threatened legal action? 

Rowland: Not formally - but there was discussion about the powers 

Our most powerful tool is transparency - publication.  Reputation is very important.  Publishing the outcome in as much detail as possible is very important.


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## Brendan Burgess (19 Oct 2017)

Rose Conway Walsh: Did you find any dissenting voices in your investigations of the bank? Did any of the executives challenge what was being done to tracker mortgage holders? 

Rowland: (struggling) . That would be an evidence issue relating to the sanctions investigation, so I can't answer it.  (Sounds to me that they did find it, but can't say so..)


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## Banking17 (19 Oct 2017)

R Conway hitting at lack of communication etc by Banks

Rowland says instructions issued to improve. Don't see any evidence of this⁉


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## Banking17 (19 Oct 2017)

CB admits they have no database from banks

CB not aware or ignoring Banks shortcomings on information


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## Banking17 (19 Oct 2017)

Where FSO has previously decided  

Rowland unaware whether or not customer can go again to FSO.  They nerd to work jointly and clarify roles

K O Donnell now.....


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## Banking17 (19 Oct 2017)

J McGuinness now

Further confusion on Phase 2 dates. Most sumbiitted in 2016.CB assurance process.

CB had Phase 2 reports all year. What have they done....

Analysis ongoing it appears.Push back‼


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## Brendan Burgess (19 Oct 2017)

Oops. I dozed off there for an hour or so.  Did I miss anything? 

Brendan


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## Banking17 (19 Oct 2017)

Still J McGuinness

Communication from Banks..missing paper work recordings

CB have advised Banks to find in customer favour.
Multiple internal Accounts Appears to happen. Shadow accounts 

Am I alone here⁉


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## Lightening (19 Oct 2017)

I turned it off !! Too depressing to watch!
The CB didn't grow the pair I had hoped they would


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## Banking17 (19 Oct 2017)

Still On

P Doherty fines calculation.10 million max. Criteria etc

Victim impact possibly

15 min break now


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## Brendan Burgess (19 Oct 2017)

I don't believe that it's still on...


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## elbo (19 Oct 2017)

The poor things, must be exhausted by it all.....like we are for the last 6 years! Was there anything new or were they still spilling the same garb in a different tone of voice


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## marchflowers (19 Oct 2017)

Was there any direct reference to the pre-2006 AIB cases in the session today?


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## Banking17 (19 Oct 2017)

Late Debate now on Trackers Rte news and Radio


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## SaySomething (20 Oct 2017)

I was on the road for work much of the day yesterday, did manage to tune in but not to update the thread.

It was a long hearing, LONG hearing. Much of it going around in circles. From speaking to 2 members of the committee in person last night, they actually fully understand the concepts of the examination that the Central Bank are undertaking. The issue was that they were trying to find a way to ask the questions so that they would get more information and answers for us, the customers. So while it felt like they were going around in circles they were trying to extract key points.

For me, the most important nugget of information was that the Central Bank has said that the banks have it within their power to redress accounts right away. They can't direct the redress. The holdup from their perspective is the compensation package but there is no reason why redress can't happen from their side. 

In my situation, and in many of others, redress is the priority. If customers could receive redress immediately, with compensation and other payments to follow, it would take a huge amount of pressure off. That's the message that I gave to the 2 committee members last night and that's the message I'll continue to communicate. 

The "Stop any further harm" clause in the Central Bank guidelines is not fit for purpose because it allows the banks to prolong the harm. 

There's been a lot of talk about giving new powers to the Central Bank or legislation to push the issue to resolution expeditiously. The wheels of the Oireachtas turn too slowly for all of us. It may prevent a similar issue from happening again in the future but that's no help to us now.

The only way that we can move this forward is to continue to tell our stories, keep it in the public eye, and continue to highlight the injustice to the member of the houses of the Oireachtas.

If anybody else feels willing to tell their story and would like to be put in touch with journalists please let me know. There are quite a number across all the publications looking to speak with you and help you communicate how the tracker scandal has affected you and your family.


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