Minister Donohoe Private Members’ Motion Closing Speech, 25th October 2017

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Private Members’ Motion on Tracker Mortgages

Paschal Donohoe TD, Minister for Finance and Public Expenditure & Reform

Wednesday October 25th 2017


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Thank you Ceann Comhairle,

I would like to start by apologising for my absence from the House earlier as I was speaking to the media to further clarify this issue for those who have been treated so shabbily by the banks.

I thank my colleague, the Minister of State, for stepping in.

I have, however, been following parts of the debate remotely and I will make myself fully aware of what has been said.

I want to thank everyone who contributed to the debate tonight and I think that this has been very useful in further highlighting the issue.



At this stage, I have met with the chief executives of the five main banks and they are in no doubt as to what I and the Government think of their actions and inactions on this issue and what I expect them to do to rectify matters and in what time frames.

They have committed to working with the Central Bank to fully meet its expectations.  

All of them have made statements unreservedly apologising to their customers adversely and shamefully impacted by the tracker rate scandal.

They have committed to a resolution for affected customers and I, the government and the Central Bank will be keeping a careful eye on them to ensure that there is no slippage.

As the Minister of State said earlier,

  • AIB is now committed to the payment of redress and compensation to over 4,100 of their customers before the end of this year;
  • Bank of Ireland to 4,300 of their customers before the end of this year;
  • PTSB to almost 2,000 customers before the end of this year and
  • Ulster Bank to 1,000 customers before the end of this year.

KBC also expects to pay the majority of its impacted customers this year and all banks have committed to resolving and completing payments to outstanding impacted accounts in 2018.

The banks will now provide the Central Bank with all the information required and do this within the timelines set by the Bank.



I have asked the Governor to provide me with a progress report by December on whether banks have made acceptable and sufficient progress in line with the commitments they are announcing today.

If satisfactory progress is being made I have asked for a further report to be provided to me by end March.

However, if the Central Bank deems that the progress made on this issue has not been sufficient or acceptable, there are a range of possible policy measures available to me, including:

  • Introducing new legislative requirements for stricter reporting for all retail banks.
  • Amending tax law in a targeted way, potentially in relation to the bank levy.
  • Activist actions as a shareholder in three of the banks consistent with the protection of franchise value over the medium term.

Let me issue a clear warning to the banks that I will not hesitate to act decisively if the Central Bank tells me that progress is not sufficient.

The banks have behaved is a manner which is completely unacceptable and it is their duty to put this right and to do so quickly.



In addition, I have mandated the Central Bank under sections 6A of the Central Bank Act 1942 to prepare a report for me on the current cultures and behaviours and the associated risks in the banks today and the actions that will ensure that banks prioritise customer interests in the future. 

On foot of this report the Government will determine whether any additional legislative and regulatory changes are needed that would enhance accountability in the banks for ensuring customer interests are prioritised.



I think that it is important to acknowledge the scale and complexity of the problem which has had a bearing on the amount of time that it takes to be resolved.

This examination has turned out to be the largest review ever carried out by the Central Bank on its consumer protection side.

It covered fifteen mortgage lenders – eleven of which it has transpired have issues to address – who may at any time have sold a tracker mortgage product to a consumer borrower, and required the review of over two million mortgage accounts.

In their personal appearances before the Joint Committee for Finance, Public Expenditure and Reform and Taoiseach, it was clear that these mortgage customers have been treated disgracefully by mortgage lenders and that they have  incurred considerable distress, loss and harm.

This suffering and harm is replicated in multiple other mortgage customers of the banks – in particular those which have either directly or indirectly lost their homes due to this harmful action by lenders.

Sadly some of the harm done to customers at this point is irreparable. 

I believe that all parties in the House are in agreement that the banks behaviour has been completely unacceptable. 

We are now approaching the conclusion of the process for the majority of customers who have suffered as a result of the behaviour of the banks and the process of the payment of compensation will now intensify by all the banks.

We will remain vigilant to ensure that the banks live up to their promises and we will continue to critically examine what more needs to be done to ensure that customers are treated properly in the future.



I would like to thank Deputy McGrath, the many other Deputies in this House, particularly the members of the Joint Oireachtas Finance, Public Expenditure and Reform and Taoiseach Committee for drawing attention to this issue.

I would also like to echo the Minister of State earlier in paying tribute to many people outside this House who have over a long period sought to bring this scandal to public attention and to ensure that the harm caused to many impacted borrowers would be recognised and as far as possible at this point put right. 

We should be clear that it was the mortgage lenders that caused this harm to their customers and that the primary responsibility to urgently resolve the problem rests with them.

Therefore, all lenders now need to bring the Central Bank examination to a conclusion without any further delay, and to do so to the satisfaction of the Central Bank and more importantly to the satisfaction of their customers which they wronged and to finally act in the best interest of their customers.

Thank you.



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