By John Lyons
The final report from the Central Bank’s Tracker Mortgage Examination makes grim reading. The tracker scandal reveals yet again the power of Irish bankers, as not one single individual banker will be held responsible for the decisions they made to rip-off their customers. And when finally forced to admit their wrong-doing, their criminal behaviour, they did their best to minimise the amount of compensation they would have to pay out.
And some consumer affairs organisations claim that the report does not go far enough: that there are still hundreds of families who have not be restored to the correct tracker rates.
Will there be any legal consequences for those individuals in the banks who made the decision to rip-off their customers? It appears not.
And the 99 families who lost their homes through no fault of their own? No amount of money can compensate them for the stress and strain they must have endured.
By the end of May, the banks had paid out €683m in compensation. Overwhelmingly the banks involved in robbing their customers are the big five, 98% of those affected were customers of AIB, Bank of Ireland, KBC Bank Ireland, Permanent TSB and Ulster Bank.
We are talking about at least 40,100 customer accounts affected. And while it might seem that the banks are now contrite, effectively, they have gotten the taxpayer to recompense the victims of their cynical practices, since the State remains a significant owner of AIB, Bank of Ireland and Permanent TSB. To the €64 billion bailout bill, we can add most of this one.
When you think about the stress of having a bank chase you for additional money that you never calculated on owing, when you think about the relationships that could not cope and especially when you think about the slick way in which these burdens were imposed, totally without justification, then the payouts are in fact low. This is especially the case for the 99 families whose average recompense was €194,000.
The problem for the banks, post-2008, is that they had made a mistake with tracker mortgages. For once, the deal favoured the customer. But the customer can’t be allowed to win. ‘Choice’ in the marketplace of mortgages is illusory. It is only a matter of minor variation and in all circumstances, as far as the bankers were concerned, they must be able to squeeze the mortgage holder.
So they broke their own contracts and their own rules and by bullying or by sleight of hand, forced thousands of people off their tracker mortgages.
There are so many lessons in this scandal about how Irish capitalism really works, it is hard to know where to start. But the takeaway is surely this, that when we lift the rock, we can see the insects crawling around. The report might not go far enough but it does allow us to see how the financial elite operate. it has exposed a world that we don’t normally get to see and which is one where the drive for profit is dominant, even if that means theft by people who pose as utterly respectable.