Laws to follow record €100m fine against banks over mortgage failings

Paschal Donohoe

Mr Donohoe said the penalty of €96.7m against AIB Group over its role in the tracker mortgage scandal indicated the “strength” of Ireland’s regulatory system.

The Central Bank of Ireland handed out fines of €83.3m to Allied Irish Banks (AIB) and a further €13.4m on EBS, which AIB acquired in 2011.

AIB, the regulator said, withdrew its tracker mortgage offering absent any “proper regard or concern for the impact on its customers”. A “litany of failings” followed, it said, that resulted in customers being wrongly denied their tracker entitlements while others “lost their tracker rates due to AIB’s deficiencies in its provision of day-to-day mortgage services”.

Mr Donohoe told the Dáil that the fines demonstrated “how seriously the unacceptable behaviour” is being taken.

The legislation to be introduced next week provides for a senior executive accountability regime that will force firms to clearly indicate where decision-making and responsibility lie so as to achieve transparency.

Seana Cunningham, director of enforcement and anti-money laundering at the Central Bank, said: “Underpinning AIB’s failings over a prolonged period of time was a culture of failing to properly consider and recognise the rights of its customers and its obligations to them.”

Colin Hunt, the chief executive of AIB Group, said yesterday: “I have said in the past, and I reiterate today, this matter represents a very large stain on the reputation of the bank. It damaged not only the affected customers, but also undermined the bank’s efforts to rebuild public trust and confidence.”