The Irish Times view on the tracker mortgage scandal: a partial reckoning

The investigation into the tracker mortgage scandal has been underway since 2015 and the broad scale of what happened has gradually become clear. Yet the figures from the Central Bank's final report on the issue are shocking: 41,000 customers have been paid €683 million in redress and compensation and 99 lost their home as a consequence of what happened. The Central Bank was slow off the mark in starting a full-scale examination, but has done a good job in pushing the banks to do the right thing by their customers. One bank, Permanent TSB, has been fined €21 million and more such fines will follow.

It was vital that the situation of customers be rectified and appropriate redress and compensation paid, though we must remember that much of this is merely returning cash which should never have been taken in the first place. Also, while significant amounts, averaging €194,000, have been paid to those who lost their homes, nothing could ever compensate many borrowers for the distress and damage caused.

That this occurred due to conscious decisions taken by all main banks must also be considered. As the report says, banks say they are focused on their customers but the evidence suggests otherwise. Not only did they decide, to take one example, to disregard contractual promises to return people on fixed rate mortgages to appropriate tracker rates, but when they were caught out delay and obfuscation characterised their response.

The length of time it has taken to sort this out is unconscionable and this is largely due to foot-dragging by the banks. The Central Bank is to be commended for its persistence in seeing the job through and ensuring that, in general, customers got the benefit of the doubt in debatable cases. That the banks have had to agree to much of this, even in cases where they feel the law might favour them, will – and should – elicit no sympathy.

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So is this now all dealt with? Not entirely, as the enforcement process will go on and some compensation payments and appeals remain outstanding. However there is one unsatisfactory issue. We still don’t know who made the key decisions and on what grounds they did so. Nor have any individuals been subject to any sanctions, either administrative or criminal. We are told that evidence has not uncovered deliberate decisions to deny borrowers their entitlements. Yet in some cases, at least, it is hard to see how else this could have happened.

New legislation is promised to make it easier for the Central Bank to hold senior executives to account in financial institutions, even in cases where wrongdoing is not proven against their organisation, and to raise the bar for corporate behaviour. It is a sad commentary on the behaviour of the banks that this is seen as necessary – but it surely is.