Another classic example of what you can shout about and demand when in Opposition, but behind the gates of Merrion Street, impossible to achieve in Irish Financial Law.

The Central Bank was likened to the “dog that doesn’t bark” at the Oireachtas finance committee yesterday over its approach to 11 banks which wrongly took customers off tracker mortgages.

When Sinn Féin TD Pearse Doherty asked governor Philip Lane if the Central Bank had powers to force banks to restore tracker mortgages to people who are still overpaying, the governor said he did not have such a power.

Prof Lane said if there was a dispute between the Central Bank and a financial institution over whether someone belonged in the compensation and redress scheme connected to the tracker mortgage scandal or not, the regulator could not simply insist that the customer was put into the compensation scheme.

However, he pointed out that the Central Bank had been successful in some cases in changing the mind of banks over individual customers, but said there “remains cohorts where we think the banks should be conceding further”.

When he was asked about the number of bank customers who have not yet been brought into the compensation and redress system, he said he could not “give too much guidance beyond saying it is significant”.

Ombudsman

He said the regulator would make the banks identify such customers by name and write to them informing them of their rights to go to the Financial Services Ombudsman or the courts to challenge the bank’s decision.

Describing this as a “dereliction of duty” on the part of the regulator and an indication it was “a dog that doesn’t bark”, Mr Doherty described the tracker mortgage scandal as “the biggest financial swindle” in the history of the State.

He reminded the committee that people had taken their lives as a result of the financial pressure they have been put under by banks, while many others had contemplated suicide. He talked of “mental breakdowns, marital breakdowns and stolen years” and said that “after all of this is done and dusted, no one is going to lose their jobs, no one is going to prison”.

Fianna Fáil TD Michael McGrath suggested that the ultimate cost of redress and compensation for all of the affected people could rise to as much as half a billion euro and said it would be “one of the greatest consumer rip-offs in our State”.

He asked the regulator what the approach of the banks was in dealing with the issue and was told “there was not a collective and uniform approach” by the financial institutions.

Resistance

Prof Lane said some banks had put a lot of resources into dealing with it while in other instances there had been “a lot more resistance, with banks taking a narrow view of who has been affected and not offering redress”.

Mr McGrath expressed the view that the scandal had not unfolded by accident and he questioned how all of the banks appeared to have made the same mistakes and face the same problem at the same time.

Mr Lane said there was an issue with the culture of the banking system. “We do think there is a common culture across the banks, which is that if there is any doubt or ambiguity about how to interpret a contract, they interpret it in the bank’s favour.”

He added he believed that the banks had a culture of seeking profitability at the detriment of their customers.

Mr McGrath asked when customers who had been identified by the banks would receive their redress and compensation, to which Prof Lane said he believed “a lot is going to happen between now and the end of 2017 and the early months of 2018. It is for the banks to ensure they satisfy their customers as quickly as possible, but a lot is going to happen in the next few months.”