Assessing the Central Bank's performance

Brendan Burgess

Brendan Burgess

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I get very frustrated by the bureaucracy and the secrecy of the Central Bank. So I have deliberately tried to counter that bias by saying nice things about them. Is the following a reasonably fair summary?


What the Central Bank has done right

  • It has got the banks to agree to review all cases and to ignore the 6 year time limit
  • It has got the banks to agree to look at the whole case – and not just the contractual right. The bank must take into account the transparency and clarity of the documentation. If it gave a customer a reasonable expectation that they should get a tracker, then that takes precedence over the legal issues.
  • Without the Central Bank's intervention, the banks would not be looking at these cases. A few would be wending their way through the Ombudsman's office.
  • They have "vigorously challenged" the banks especially on those deemed "not impacted".

Where the Central Bank has failed the borrowers

  • They were very slow to act
  • Now that they are acting, they have imposed their idiotic bureaucratic approach on the banks. This makes it impossible for the banks to do it properly.
  • There is no sense of priority or of materiality
  • The enforcement actions should not be taking two years

What the Central Bank should do now

  • Come out from behind the cloak of confidentiality as it is allowed to do if it is in the interest of consumers
  • Issue their opinion on certain cohorts e.g.
    Where a customer lost their tracker unfairly and switched to another lender, the original lender must offer to take them back on the same conditions
    Where a customer was not offered a tracker on conclusion of a fixed rate, and
    that rate was specified to be the “prevailing rate” the prevailing rate should be
    Whatever the bank decides, or The last rate at which the bank issued tracker
    mortgages
    Where a lender rescheduled a mortgage on condition of giving up a tracker, then
    that person should be given back their tracker, even if was before 2010.
  • Where a bank deems a person to be “not impacted”, they should write to that person immediately and say so.
 
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Here are the relevant sections of the Central Bank Act

Section 33 AK


1 (b) A person to whom this subsection applies shall not disclose confidential information concerning—


(i) the business of any person or body whether corporate or incorporate that has come to the person’s knowledge through the person’s office or employment with the Bank, or

(ii) any matter arising in connection with the performance of the functions of the Bank or the exercise of its powers, if such disclosure is prohibited by the Rome Treaty, the ESCB Statute or the Supervisory Directives.



(5) Subject to subsection (1)(b), the Bank may disclose confidential information—


(b) with the consent of the person to whom the information relates and, if the information was obtained from another person, that other person, or



(af) if the Bank is satisfied that the disclosure is necessary to protect consumers of relevant financial services or to safeguard the interests of the Bank, or

Take for example the Central Bank's discussions with AIB on the prevailing rate issue.

Let's say that the Central Bank disagrees with AIB's approach.

It could seek AIB's permission to publish its disagreement.

If AIB refuses such permission, it could invoke section (af) that it is necessary to protect consumers
 
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To the best of my knowledge, The Central Bank has refused all FOI requests from media and Oireachtas as to the progress of Phase 2 and the tracker examination as a whole. Even partial requests are being refused.
 
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