Finance Committee meeting Minister for Finance and Central Bank this week

[Dunned]

Michelle Hennessy from the Journal has been tweeting updates. She tweets "Lane says the rate at the time (say in 2008) would have been high because bank funding was through the roof . The Central Bank agrees with lenders in their evaluation of the "prevailing rate".

 

[Thomas]

Doesn’t explain why prevailing rate has not fallen since then even though bank’s cost of funds has plummeted!

Did Padraic mention anything about the ptsb prevailing rate when he was on the radio - or is he on it later this afternoon?

 

[IdesofMarch]

Doesn’t explain why prevailing rate has not fallen since then even though bank’s cost of funds has plummeted!

Did Padraic mention anything about the ptsb prevailing rate when he was on the radio - or is he on it later this afternoon?

It did not fall because the margin (which is fixed) was set at 3.67% above ECB by AIB

 

[Thomas]

It did not fall because the margin (which is fixed) was set at 3.67% above ECB by AIB

I was refering to PTSB where they happily increased it over a period of time (went from 1.1 to 1.68 to 2.25 to 3.25) but have not reduced it. Does that mean that if someone (who has been given a 3.25% rate) fixed now for a year in PTSB and then were entitled to be offered a tracker at the end of the fixed peirod, as the cost of funds are now so low PTSB would have to offer a lower margin than the current 3.25%.

 

[IdesofMarch]

I see, what year did you come off your fixed rate.

 

[Thomas]

i broke out of the 3 year fixed rate period in December 2008 (when the prevailing margin was 1.68) but my 3 year period expired in March 2010 so they have offered me my tracker back at 3.25%

 

[IdesofMarch]

i broke out of the 3 year fixed rate period in December 2008 (when the prevailing margin was 1.68) but my 3 year period expired in March 2010 so they have offered me my tracker back at 3.25%

Thomas,

If you broke out of the fixed rate in Dec 08, then, by CBI logic, you must be offered the prevailing rate existing at this point in time. You state that PTSB prevailing tracker rate fixed margin in Dec 2008 was 1.68%. That is the rate that your tracker mortgage margin should be above the ECB base rate. The bank's stance of offering you the prevailing tracker rate fixed margin that existed in March 2010 is a nonsense and is in conflict with the CBI in it's assessment Therefore you should set out your case in writing to PTSB as you come within the broad parameters of the current CBI mortgage tracker investigation. Send a letter (registered) to PTSB setting out your situation. Request that your tracker mortgage be included in their current mortgage tracker investigation as you are impacted customer.

 

[Wardy7]

That’s not the CBI stance on prevailing rate. They said today that they are in agreement with the banks interpretation of it.

 

[Thomas]

The issue is whether it’s the prevailing rate at the end of the fixed period or, as I broke out early from my fixed period, is it the prevailing rate when I broke out I.e break date rate. Case is with the FSO at present!!

 

[IdesofMarch]

That’s not the CBI stance on prevailing rate. They said today that they are in agreement with the banks interpretation of it.

Thomas case is different, he broke out of his fixed rate term early. Therefore, he is entitled to the prevailing tracker rate existing at the time of the break out, not the one prevailing at the end of his fixed term.

 

[IdesofMarch]

The issue is whether it’s the prevailing rate at the end of the fixed period or, as I broke out early from my fixed period, is it the prevailing rate when I broke out I.e break date rate. Case is with the FSO at present!!

You should win.

 

[Thomas]

Fingers crossed!!!

 

[Wardy7]

Oh, ok. So did I!

 

[Redman]

Hi idesofmarch,we drew down 30 sept 08 fixed for 2 years,we had been offered 2 fixed options a variable and a tracker to choose from the tracker rate was 5.75%(4.25 ecb+1.5% margin at the time of drawdown.
10 days later aib stopped offering trackers for new customers not a word of this happening was mentioned to us when talking with them about us buying their product.
According to Bernard Byrnes the banks view of the prevailing rate is “that it is the rate that prevails at the time at which the product is offered and that is how we consider it”.So 1.5% was the prevailing rate at the time of offer should this rate apply to our mortgage,your thoughts would be appreciated

Redman​

 

[meepman]

If that is true, then when PTSB were offering their new tracker rates when the dsicounted tracker expired, they should have been offering the tracker rate that was valid when the loan was first taken out and not when the discounted tracker expired.
In this case the wording 'discounted tracker rate' would then be valid too.

 

[TrackerThieves]

I'm not too familiar with the prevailing rate issues but from what governor lane said today he seems to have sided with the banks on the prevailing rate and I would imagine they will set out what these rates would have been at certain points in time. increasing from october 2008 onwards.

I believe the banks fully knew what they were doing in getting people off their trackers and how they went about it, disgraceful that the central bank appear to be letting them off the hook here.

• Did the banks introduce artificially low fixed rates in the first place to lure people off their trackers?
• Did they waive fees that would have normally been charged and select which customers(ie those with trackers) could switch free of charge? This thread from 2008 seems to suggest that
• Those in the prevailing rate scenario, would it be worth looking at the how and why the banks got customers off the trackers in the first place if central bank side with the banks on the prevailing rate?

 

[Dan Murray]

I believe the banks fully knew what they were doing in getting people off their trackers and how they went about it, disgraceful that the central bank appear to be letting them off the hook here.

Mr. Lane admitted yesterday that the Central Bank had to look long and hard at the prevailing rate issue.

If what he says is true, it follows that the position was unclear, otherwise put, there was ambiguity.

My understanding is that the Central Bank's own code is that where ambiguity exists, it should be interpreted in the consumers' favour.

The CB has interpreted this ambiguity in the favour of banks. In other words, this is a complete non sequitur - which is shameful but not surprising.

It was pretty sickening to observe the self-congratulatory tone of the CB yesterday - the truth is that they were dragged kicking and screaming by the Finance Committee into action. The Regulator simply did not regulate - comments like we've been on top of this since 2008 are ridiculous.

There was one very interesting moment yesterday when Mr. Lane clearly did not even know the upper limit of available sanctions on banks yesterday and had to be rescued by Ms. Rowland. Quite a scary level of incompetence.

 

[joe351980]

i broke out of the 3 year fixed rate period in December 2008 (when the prevailing margin was 1.68) but my 3 year period expired in March 2010 so they have offered me my tracker back at 3.25%

I hate the term 'broke' you didn't brake you're contract. You only activated a clause in your contract allowing you to end your fixed rate period.
The most you can be penalised is the financial loss to the bank from Dec 08 up to March 10. It says this in black and white

 

[TrackerThieves]

Just thought i'd post these here if anyone was intrested
Comitee meeting thursday 18 Jan 2018
Video
PDF

 

[delsalmon]

i broke out of the 3 year fixed rate period in December 2008 (when the prevailing margin was 1.68) but my 3 year period expired in March 2010 so they have offered me my tracker back at 3.25%

Hi Thomas I am in a similar situation. Ptsb. Drew down Dec 07, fixed rate til Dec 09. But April 09 broke out early.
Offered 3.25% but in April 09 it was 2.25%, and standardisation sheet from Dec 07 was calculated at 1.1%.
Currently being investigated by Ptsb, I'll be taking a case with fso if not happy with the outcome.
Can you keep me informed by pm how your case goes please?
Thanks