Former Permanent TSB (PTSB) chief executive David Guinane insisted on Thursday that he did not agree to giving some customers preferential treatment when a strategy was adopted in 2009 on how to handle certain tracker-mortgage borrowers.
Mr Guinane was speaking at an inquiry into whether he participated between January 2009 and April 2010 in an alleged regulatory breach by failing to live up to a general principle of the Consumer Protection Code 2006 to act in its customers’ best interests.
The case centres around a clause in boom-era PTSB tracker loan documents – known as special condition 706. This required customers that moved for a period to a fixed rate to instruct the bank as they came off this rate to put them back on a tracker rate. Otherwise, they would default to a standard variable rate.
[ ‘OK to that’: Quick-fire emails can come back to haunt youOpens in new window ]
The ambiguous wording of special condition 706 raised questions in early 2009 about whether a customer looking to return to a tracker rate after a fixed period was entitled to the original margin over the European Central Bank rate, or a higher margin offered by the bank.
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On January 16th, 2009, PTSB’s then head of marketing, Niall O’Grady, told Mr Guinane that internal legal advice proposed that only customers who complained about being put in on a higher margin – or actually requested the original one – should be put on the more favourable rate. Mr Guinane responded after receiving a follow-up email three days later, saying “ok to that”.
Mr Guinane told the inquiry on this week that he has no memory of reading the email or the general consideration of the matter when it emerged 15 years ago.
Under questioning from Ailbhe O’Neill SC, acting for enforcement with the Central Bank, Mr Guinane said on Thursday he understood this email to mean “any customer” coming out of the fixed rate would “go back to their original rate”.
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“That’s actually what I agreed. I further agree that was not the decision that was taken forward by the bank and was implemented,” he said.
Ms O’Neill highlighted correspondence from Mr Guinane’s legal team in 2022 to the Central Bank, which suggested the former banker would have had to “formulate his own counter proposal” to the one outlined in the January 16th, 2009 email to ensure all customers returning to a tracker loan went back on their original rate.
She alleged this is “entirely inconsistent” with his position that he understood all such customers would revert to the original rate.
However, Mr Guinane said that his evidence now is based on having read all relevant documents he received as under disclosure as part of the inquiry.
Closing legal submissions relating to the case are scheduled for late next week.
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