The figures are striking – a record €37.8 million fine, 43 properties lost including 29 family homes, and 49 regulatory breaches identified. The Central Bank's findings against Ulster Bank are another sorry episode in the tracker mortgage saga, in which all the main banking groups played dishonourable roles. It is clear that what happened here wasn't a series of administrative slips or errors – it was deliberate bank policy.
Ulster Bank, which is planning to depart the Irish market, has said that it has learned, and changed. So have the other banks caught up in this . But you would wonder. They have a long way to go to win back trust and the Irish Banking Culture Board, set up as a way to restore consumer confidence in the sector, is strangely quiet.
Banks were in trouble after the financial crash hit in 2008 and big tracker loan books were one of the reasons. Suddenly the cost to them of raising funds had rocketed, but the interest rate on tracker loans – which are charged at a set rate above the ECB rate – remained low. Tracker loans were loss makers and the banks were trying to get out of them, even though this would cost their customers.
Ulster Bank’s regulatory breaches reflected clear decisions as opposed to unfortuante incidents. Among the episodes was a largely unsuccessful attempt to get people to give up their trackers in 2008, without explaining the consequences and in 2011 a refusal to restore many borrowers coming off fixed rates back to the tracker rates to which they were entitled. There was a deliberate campaign of not giving full information to borrowers.
Then in 2015, after the Central Bank belatedly began its investigation, the bank failed to immediately stop the damage to those affected. And it made life difficult for the Central Bank, which at one stage considered going to the High Court to seek access to information.
Nor was Ulster Bank alone in this. Permanent TSB has already been fined and Bank of Ireland and AIB have made provisions for expected fines in their case. The details are different in every case, but the intent was the same – to disadvantage customers and save the institution money.
It is not clear if the Central Bank will pursue cases against individuals in any of the banks. It has said its investigations are continuing and in some cases – in which the institutions have not been identified – files have gone to the Garda. Given the deliberate nature of what happened, we must hope these are being carefully examined. And the Government must finally publish new legislation which will give the regulator greater powers to hold individuals in the financial services sector to account. For now, we do not even know whether those responsible are still in their jobs. So much for cultural change.