Bringing criminal charges against banks found to have mistreated customers in the tracker mortgage scandal would be “relatively simple”, legal sources say.
On Thursday, Central Bank governor, Philip Lane said his institution was working with the Garda and other State agencies on the mater, although he stopped short of saying that a criminal investigation is under way.
The bank's director general for financial conduct, Derville Rowland, told the Oireachtas Finance Committee the matter had been "discussed" with gardaí but that a formal investigation had yet to be initiated.
Legal sources, including criminal lawyers who have prosecuted officials from Anglo Irish Bank, say a 2001 change in the law could make it easier to bring charges of theft and fraud against the banks involved.
In 2001 the Criminal Justice (Theft and Fraud offences) Act was signed into law. It changed the definition of theft from permanently depriving a person of property to “temporarily or permanently depriving them of property”.
One barrister said that “a case could be made that banks are committing offences where they continue to charge interest rates after they know, or ought to reasonably know, that it is the wrong rate.”
“What is the difference between doing that and a punter taking money incorrectly credited into his account by a bank error?” Such cases are regularly prosecuted as theft, he said.
‘Couldn’t be simpler’
Another barrister said: “That means that, even if the banks claim they were always going to pay the money back, the offence would still stand as it includes temporarily depriving someone of property.
“It seems to me to be really, really simple. They could drag down a couple of chief executives, interview them, arrest them and charge them with these offences. It couldn’t be simpler to bring charges.
“Because all they have to do is prove the banks took money out of the account, even temporarily, on false pretences.”
The challenge would be to prove the banks knew they were taking the money on false pretences, another said.
Bringing theft or fraud charges would be a relatively simple proposal compared with the complex and obscure charges under the Companies Act the DPP brought against Anglo executives in recent years.
On Thursday Ms Rowland told the Finance Committee that the Central Bank “couldn’t say” if criminal proceedings would come in the wake of its investigation into 11 of the 15 mortgage lenders who were operating in the State between five and 15 years ago who wrongly took people off tracker mortgages, but confirmed the regulator had met with gardaí on two separate occasions to discuss the issue.
