Banks asking people to sign confidentiality agreements prior to restructuring

[Brendan Burgess]

Some banks have apparently being asking customers to sign confidentiality agreements prior to even beginning negotiations on restructuring their mortgages. Ciaran Lynch TD wrote to the Central Bank and got the following reply: (It's OCRd from a PDF, so apologies for the typos)

[FONT=&quot]Mr Ciaran Lynch TD[/FONT]
[FONT=&quot]29 St. Patrick's Mills[/FONT]
[FONT=&quot]Douglas[/FONT]
[FONT=&quot]Cork.[/FONT]
[FONT=&quot]
[/FONT] [FONT=&quot]T +353 I 2246000 F +353 I 671 6561[/FONT]

[FONT=&quot]Bosca OP 559, Sraid an Duma, Baile Atha Cliath 2, Eire.[/FONT]
[FONT=&quot]PO [/FONT][FONT=&quot]Bos: [/FONT][FONT=&quot].\"0. [/FONT][FONT=&quot]559, [/FONT][FONT=&quot]Damr Strut. Dublin [/FONT][FONT=&quot]2. [/FONT][FONT=&quot]lrelutul,[/FONT]


[FONT=&quot]4 June 2013[/FONT]

[FONT=&quot]Re: Confidentiality Agreements[/FONT]

[FONT=&quot]Dear Deputy Lynch,[/FONT]


[FONT=&quot]We refer to your letter of 5 April 2013 addressed to the Governor of the Central Bank in which you raised the issue of the use by lenders of confidentiality agreements in loan restructuring agreements with mortgage holders.[/FONT]


[FONT=&quot]As you are aware, since receiving your letter, we have been considering the issue of the use of these agreements by lenders. You will appreciate that simply restricting the use of a confidentiality agreement by lenders would go beyond the Central Bank's powers and would amount to interference with the freedom to contract. However, in the interest of consumer protection, and mindful of the points in your letter, we have taken a number of actions:[/FONT]


[FONT=&quot]1. We have written to the various lenders requesting information on all aspects of the use of these agreements, including copies of the agreements which have been used by lenders to date.[/FONT]

[FONT=&quot]In [/FONT][FONT=&quot]terms of the extent to which this is current practice, from the information which we have received from lenders to date, it would appear that not all of the covered banks are using confidentiality agreements. We are, however, still awaiting further information from some lenders, and would hope to receive all the information requested over the coming weeks. Once we receive the outstanding information from the lenders we will assess the matter further.[/FONT]


[FONT=&quot]2. [/FONT][FONT=&quot]In [/FONT][FONT=&quot]addition, you will be aware that the Central Bank is currently in the process of reviewing the[/FONT] [FONT=&quot]Code of Conduct on Mortgage Arrears (CCMA). Under the current CCMA, lenders are required[/FONT] [FONT=&quot]to have a MARP (Mortgage Arrears Resolution Process) Booklet which provides information to consumers in arrears who are engaging with their lenders. As part of the review of the CCMA, we are considering the inclusion of additional items to disclose in this MARP Booklet, including a requirement for lenders to disclose, where relevant, summary information on the use of or potential use of confidentiality agreements or similar agreements. It is expected that the review of the CCMA will be completed by end-June.[/FONT]


[FONT=&quot]Finally, you asked whether this practice will continue under the Personal Insolvency Legislation. However, this legislation and its operation is separate from fmancial services regulation, so I cannot comment on this aspect.[/FONT]


[FONT=&quot]I hope this is helpful and thank you for raising this issue with us.[/FONT]


[FONT=&quot]Yours sincerely[/FONT]

[FONT=&quot]Colm Kincaid [/FONT]


[FONT=&quot] Head of Banking and Policy[/FONT]
[FONT=&quot]Consumer Protection Directorate[/FONT]

 

[Brendan Burgess]

And a statement from Ciaran Lynch

BANKS CONFIDENTIALITY CLAUSES CAUSE CONCERN - LYNCH​

Ciarán Lynch T.D., Chair of the Oireachtas Finance Committee, has expressed his concerns regarding the use of confidentiality agreements by lenders, which may act to the detriment of borrowers.
“I am deeply concerned with the use of confidentiality clauses by lenders as a prerequisite to any discussion with customers. It amounts to a ‘sign before we talk’ provision, which is deeply worrying.
“I have significant concerns regarding the absence of consistency on this issue across different lenders, with the result that not all distressed mortgage-holders are being treated fairly. Any inconsistency can only serve to disadvantage distressed borrowers, who are on the weaker end of the borrower-lender relationship.
“I wrote to Professor Patrick Honohan, Governor of the Central Bank, to express my concerns. Having received the Central Bank’s response, I welcome their acknowledgment of these concerns, and their action to seek information from the banks with regard to how this practice operates.
“There are additional concerns regarding the absence of external scrutiny of such agreements. It is my expectation that these concerns will be reflected in the Central Bank’s review of the Code of Conduct on Mortgage Arrears, which will be completed by the end of this month.
While I welcome the fact that the Central Bank is taking my concerns on board on this matter, however I still believe we need a full and complete explanation from the banks as to why these confidentiality agreements are needed, and I intend to pursue this issue in the interests of distressed mortgage-holders.

 

[Bronte]

'however I still believe we need a full and complete explanation from the banks as to why these confidentiality agreements are needed'




That's a good question. The only reason is that banks don't want everybody to know they are doing deals as those that are currenly struggling but payign their mortgage could decide that if Johnny next door gets a deal of debt writedown and still lives in his home than why shouldn't he. And he might decide to default. Strategically

Personally don't have a problem with confidentiality agreements, only problem is that I'd worry that ignorant borrowers who are stressed might sign a deal that was in no way beneifical, that it might appear so but was not and was only in the banks interest. And the CB or whoever, well someone needs to be a consumer champion. Maybe there shoudl be a rule that whetever deal is done has to be in the consumers interest and if it is not the borrower, has the right of say an independant review.

 

[ang1170]

I think the more illuminating aspect of this correspondence is the revelation of the relationship between the banks and their so-called regulator. It's an absolute joke:

"In [FONT=&quot]terms of the extent to which this is current practice, from the information which we have received from lenders to date, it would appear that not all of the covered banks are using confidentiality agreements. We are, however, still awaiting further information from some lenders, and would hope to receive all the information requested over the coming weeks."[/FONT]

Same old, same old: the central bank writes a letter to the bank and waits a few weeks "hoping" for a response. Are these guys for real? It's no wonder the Anglo folks treated them with contempt....

 

[breakonthru]

Why don't folk do what I did, sign the confidentiality agreement with their bank after cutting a deal - then- come on to AAM and detail exactly what deal was got, anonymously

 

[Gerry Canning]

why don't folk do what i did, sign the confidentiality agreement with their bank after cutting a deal - then- come on to aam and detail exactly what deal was got, anonymously

...........................................................................................

Brilliant !!!!

 

[Brendan Burgess]

Why don't folk do what I did, sign the confidentiality agreement with their bank after cutting a deal - then- come on to AAM and detail exactly what deal was got, anonymously

When were you asked to sign a confidentiality agreement?

Was the offer the 3 year interest-only?

As this was generally available, I doubt if ptsb mind it being discussed openly.

Brendan

 

[breakonthru]

Confidentiality Clause contained within new 3 Year Int Only Agreement

Hi Brendan, from what I can recall there was a confidentiality clause in the agreement I signed and sent back to PTSB.

 

[Palerider]

Why do people think that debt write off is new..? I've been in the banking business 28 years before jumping ship back in the late 2000's to do other things, debt write off is an everyday part of banking business from the start of time.

I have succeeded in having more than one Bank agree a write down and yes subject to a confidentiality clause and so what, there is no mystery and no drama involved.

Do the best deal you can do and if you do not feel capable then get the best person you can to bat for you, logic wins almost every time.