# Oireachtas Finance Committee meeting Central Bank



## Brendan Burgess (16 Oct 2020)

Wednesday next 2 pm.  Committee Room 4 

Not sure what items are on the agenda. 

But if you have questions for the Central Bank, send them to one of the members of the Committee.

*Deputies*
Mick Barry
Solidarity - People Before Profit
Pearse Doherty
Sinn Féin
Bernard Durkan
Fine Gael
Mairéad Farrell
Sinn Féin
Steven Matthews
Green Party
John McGuinness - Chair
Fianna Fáil
Jim O'Callaghan
Fianna Fáil
Neale Richmond
Fine Gael
Peadar Tóibín
Aontú
*Senators*
Pat Casey
Fianna Fáil
Aidan Davitt
Fianna Fáil
Alice-Mary Higgins
Independent
Marie Sherlock
Labour Party


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## Brendan Burgess (19 Oct 2020)

Any questions for these guys? 

I will probably suggest the following 

"Congratulations on the firm way you dealt with KBC bank's handling of the tracker review process. [ insert quotes] 

But all these actions were done by people. Have you sanctioned any of the executives of KBC? some of them are still working in banks and industry at present.

And when will you be concluding your investigation into AIB?"


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## Manor (19 Oct 2020)

agreed and also maybe ask 
Have they any view on the matters and scenarios still outstanding with KBC (flyer scenarios..etc) in light of their findings on KBC’s culture and attitude towards their client base.


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## Brendan Burgess (19 Oct 2020)

Manor said:


> maybe ask



Hi Manor

I have provided the list of members.  If you want a question asked, contact one or more of them.

Brendan


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## tnegun (20 Oct 2020)

Would it be worth asking why the bulk of the AIB Prevailing Rate customers were excluded from the TME? I did ask via email but got a stock response.


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## Brendan Burgess (20 Oct 2020)

Good ideas folks

I would say that the members of the Committee would welcome an informed question to put to the Governor.

Brendan


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## MaxGordon (20 Oct 2020)

Looking forward to it

Hopefully we will have a Doherty v. Rowland exchange - this stuff is pay per view quality


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## NoRegretsCoyote (20 Oct 2020)

I know you all love a good micro consumer issue but you should really focus on the big, strategic stuff that could cause problems if done wrong.

I read a transcript of the Regulator c 2006 at an Oireachtas committee and the members were all obsessed with stuff like exchange rate overcharging while giving out loans like snuff at a wake. Who remembers that now after tens of billions in bailouts?


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## tnegun (20 Oct 2020)

I've sent mine to Bernard Durkan as he had made representations for me before on the Prevailing Rate issue and promised to follow up so lets see if he raising anything.


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## Brendan Burgess (20 Oct 2020)

tnegun said:


> I've sent mine to Bernard Durkan



Excellent. Well done!


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## Brendan Burgess (20 Oct 2020)

NoRegretsCoyote said:


> I know you all love a good micro consumer issue but you should really focus on the big, strategic stuff that could cause problems if done wrong.



They are both important.

I have lobbied the former committee on supporting the Central Bank's  lending limits which really surprised them.

And getting the people who have treated consumers badly out of financial services is a big strategic issue.

However, there is nothing to stop you contacting the members to raise the big strategic stuff. 

Brendan


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## tonymac (20 Oct 2020)

I have contacted Pearse Doherty and asked him to raise what stage their investigation into AIB/EBS is at. I have told him about the utter frustration about the delays and lack of adequate reasons and explanations surrounding the EBS variable base rate cohort. I only saw this thread today so hopefully Pearse gets to raise it for us.


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## WizardDr (20 Oct 2020)

Pearse has asked so many questions he must at this stage at least have some answers er........


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## tnegun (21 Oct 2020)

Looking at the schedule this will be at 2pm in Committee Room 4. If its correct and its streamed, it will be at this link https://www.oireachtas.ie/en/oireachtas-tv/cr4-live/ for anyone interested.


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## Brendan Burgess (21 Oct 2020)

Gabriel Makhlouf
Ed Sibley
Derville Rowland

In three separate locations.

The Governor's opening address

Supporting borrowers affected by Covid
Initial reaction without individual assessment.   3.4% of mortgages initially.
Most have resumed payment. But some will require individual assessment.
Temporary measures are appropriate for temporary income shocks. But longer term shocks require longer term arrangements.

We expect lenders to apply temporary arrangements in cases where the shock is temporary and where there has not been time to assess the borrower fully.

*Trackers *
€780 m in refunds and compensation [ €300m due to AIB Prevailing Rate alone - BB] 

Well into our enforcement investigations    KBC and ptsb done. 

Supervisory phase completed.  We continue monitoring the Ombudsman and Court decisions. 

*Credit unions*
Are an important part of the Irish financial system.


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## Brendan Burgess (21 Oct 2020)

Each member has 6 to 8 minutes

Jim O'Callaghan FF

(Not sure who else is here - Pearse Doherty ,  Alice ?   )

What will be the impact of the pandemic
What measures do you think would be available to the Irish government to tackle youth unemployment

Trackers...
Fines imposed on KBC for the codes
Did you seek any legal advice as to whether KBC and the other banks were involved in criminal activity?

Derville: The Central Bank has very good legal staff. We are obliged to report suspicious to Gardai. We have liaised extensively and closely with the Garda

O'Callaghan: So can I tke it that there might be criminal prosecutions?

Are you able to impose sanctions on individuals?

Derville: We have a number of powers including the Administrative Sanctions Procedure

First we must show that the bank has broken the Codes
Then, but only then, can we go against the individuals.

Secondly - we have f itness and probity powers - We have used them to challenge individuals.  Some people in senior roles have been prohibited from acting in those roles.

Thirdly - we have to report suspicious act to the Gardai.


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## Brendan Burgess (21 Oct 2020)

Pearse: Have you reported suspicious activity to the Gardai

Derville: Yes, we have.

Pearse: Ulster Bank sale causing concern. €21 billion loan book  - Cerberus an aggressive vulture fund.

Governor: Can't comment on Ulster Bank or Cerberus. The protections are independent of the entity who owns the mortgage.

Pearse: There is a big difference between a bank active in the market which needs to take a long term view and a vulture fund which has a short term interest.

Governor: The Regulatory Frameworks apply in equal measure to all consumers whoever owns the loan.

Pearse: Payment breaks.  Do you accept that the banks are not offering borrowers an alternative payment arrangement especially if you are on the PUP.   

An AIB customer. Front-line worker.  His partner has been down by 70%. They had a 6 month payment break. 2 days before the full repayment was due that they had to meet the full payment. They were refused an extension. 

Governor: We want to hear about where banks are not meeting our expectations. 

Pearse: Reach out to MABS.  Another comment.  Another borrower: We have spoken to the bank and they just don't want to know. 

Governor: We have reached out to MABS.

Ed: WE met MABS last week. We had a roundtable with Civic Society earlier in the summer. [ I was at that - BB] 
We engage with the lenders. 

*The Central Credit Register is misunderstood*
It is not a score. 
It just records payments made.


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## Brendan Burgess (21 Oct 2020)

Deputy  Mick Barry  PBP 

Working people are the backbone of the country. They bailed the banks out.  

The €350 PUP and the ban on evictions is back. 
But the mortgage moratorium is not back. 
That is wrong. 

It will cause a lot of heartbreak to ordinary working people. 

They are betrayed. 

How can you say that the best approach is an individually tailored approach when there are 10s of thousands of people who need it.

Sibley: Take a retail worker who loses their job and who may have a long term problem. Probably what is best for that borrower is to work out a long term arrangement, not to go in and out of temporary breaks. 

But a short additional interim payment break might be the best solution while they are assessing the longer term. 

Mick Barry: I might concede that there might be retail workers who would not have this as the best solution. But there are many workers out there who need a payment break. They have lost the right to a payment break.


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## Brendan Burgess (21 Oct 2020)

*Deputy  Steven Matthews   Green *

Personal savings have accrued in the economy since the shut down.
How could we instil confidence to  encourage those people to spend that money to invest in infrastructure, decarbonising? 

*Governor *
The role of savings will be a very important part in the recovery.

*Matthews:*
We have had cases of people who had their mortgage offers pulled just because they have lost their job. What can the Central Bank do in that situation?  Can you request the bank to be more lenient and adopt a long term view

*Governor: *
I made it clear that the banks' approach was too broad brush. They should look at each case individually.

*Ed *
There is a limit on what we can do here requiring banks to make lending decisions.  We expect them to look at these in a sensitive and prudent way.  It's not in the borrowers' interests to be given imprudent loans.


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## Brendan Burgess (21 Oct 2020)

So my summary of what the TDs want

1) Everyone should get mortgages irrespective of their repayment capacity
2) They should then have an automatic right to an indefinite payment break.

This is mad stuff.

Brendan

Oh, I forgot and lower mortgage rates!


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## Brendan Burgess (21 Oct 2020)

Senator Marie Sherlock Labour 

Is the CCMA  appropriate? 
This code was produced in 2013. Does it need to be updated? We are in a very different time and different banking system.

Derville: There is nothing soft about our regulation


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## Brendan Burgess (21 Oct 2020)

I've had enough. If anyone is still watching and sees anything interesting, please do post it. 

Brendan


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## Sadim (21 Oct 2020)

Brendan Burgess said:


> So my summary of what the TDs want
> 
> 1) Everyone should get mortgages irrespective of their repayment capacity
> 2) They should then have an automatic right to an indefinite payment break.
> ...



Thats what you get when you get the Loony Lefties in there..... common sense, reason and personal responsibility goes out the window. This is just grandstanding.


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## Brendan Burgess (21 Oct 2020)

Sadim said:


> Loony Lefties i



I must have  missed the bit where the rational right  FG and FF members challenged this. 

Brendan


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## Sadim (21 Oct 2020)

Brendan Burgess said:


> I must have  missed the bit where the rational right  FG and FF members challenged this.
> 
> Brendan



Well, I was referring those very vocal people who always claim the people they represent should get things for free (housing, healthcare and other benefits) and that somebody else must pay for it.


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## Sadim (21 Oct 2020)

Brendan Burgess said:


> I must have  missed the bit where the rational right  FG and FF members challenged this.
> 
> Brendan





Brendan Burgess said:


> I must have  missed the bit where the rational right  FG and FF members challenged this.
> 
> Brendan



Besides it was you Brendan that pointed out those same noisy TDs wanted mortgages for everybody without reference to repayment capacity and then get automatic and indefinite repayment breaks.... I was just matching your incredulity!


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## Brendan Burgess (21 Oct 2020)

Sadim

I agree with you. But it's not just the looney left. Unless you are including the FF and FG members in the Looney Left.

There is no TD or Senator prepared to stand up and say anything other than the populist line. 

Brendan


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## MaxGordon (21 Oct 2020)

TDs need votes.

Being non-populist is really not a smart strategy for getting votes.

Dems the rules.

The CB folk had their agenda as well. Dems the rules also.


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## Sadim (23 Oct 2020)

Brendan Burgess said:


> Sadim
> 
> I agree with you. But it's not just the looney left. Unless you are including the FF and FG members in the Looney Left.
> 
> ...



Well, I've long believed FF in particular are trying to out-left SF and it's a strategy that is doomed to failure on two counts:
a) They will never win over SF voters and
b) they will just lose the their traditional natural base of centrist voters


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