The general secretary of the Financial Services Union has said the Irish banking industry has been destroyed by fear.
Larry Broderick, who will step down next year after 32 years with the union, said he was surprised by the scale of the tracker mortgage issue and he believed it had caused huge reputational issues for the industry.
He also called for an independent third party to be appointed to ensure that all customers and bank officials who had seen their tracker mortgages removed by the banks were properly compensated.
Mr Broderick said the internal process set up by the banks was not sufficiently robust and that people needed to know if there was collusion between the banks.
He was commenting after Bank of Ireland said on Thursday that it had identified another 6,000 customers who were wrongly removed from low-interest tracker mortgage loans.
This brings to more than 10,000 the number of people affected by the controversy at Bank of Ireland alone. Almost 2,000 of the bank’s own employees are among those affected and all are set to be compensated.
The remediation process could cost the bank about €200 million, up substantially on the €25 million it had already set aside in provisions.
Speaking on RTÉ Radio’s Morning Ireland, Mr Broderick said the message for banks was to “own up, apologise to customers and to staff, and give proper redress so people could feel vindicated”.
Unfairness
“The concern for us has always been for bank officials or customers having to take on the powers of a bank who have huge legal support. We need a resolution to this that recognises unfairness in the interest of staff and indeed customers.”
Mr Broderick said the challenge was rooted in the banks taking a legalistic approach to the tracker mortgage issue and not considering the implications for the people concerned.
Bank of Ireland’s admission yesterday was “a welcome development” and he hoped the other banks would do the same.
He also said that an independent third party should be appointed to ensure that all customers and bank officials who had their tracker mortgages removed by the banks were properly compensated.
“I don’t think you can have a standard approach to compensation right across the board, because every person’s set of circumstances will differ.”
He said the FSU first became aware of the tracker mortgage issue when it was raised by members in 2009/2010.
The union brought the issue to the banks, and the banks’ view was that they were doing what they were entitled to do legally. He said the union lobbied politicians and the Central Bank to get involved in the issue.
When the compensation process is over, there needs to be a narrative so that people can understand how this happened, Mr Broderick said.
