CENTRAL BANK OF IRELAND
Use of Confidentiality Clauses/NDAs:-
The Tracker Mortgage Examination framework (TME), as designed by the Central Bank, has never mandated that as a condition of receiving redress and compensation pursuant to the TME, that customers would be required to sign a confidentiality clause. The use of confidentiality clauses and/or non-disclosure agreements (NDAs) is not a feature of the terms of the TME.
The TME was created to drive redress and compensation to those affected customers without them having to independently raise a complaint or pursue litigation. The Central Bank required the lenders to proactively identify impacted customers and to provide redress and compensation to them. The TME gave customers the option of avoiding the costs and stress of public adversarial processes like court proceedings.
In the TME, once customers were deemed impacted, the Central Bank required that any redress and compensation be paid by lenders immediately and the customers could then choose their next steps. If customers were unhappy with their payment, we ensured that the lenders provided an appeal to those customers, without cost to the customer and without the customer risking their payment. The initial payments of redress and compensation for all customers in the TME could never be lowered or taken from them on appeal. If customers had pursued litigation outside of the TME they would not have had this guarantee.
The Central Bank also ensured that even if customers appealed, their full legal rights would remain should they wish to pursue other avenues, such as the FSPO or court proceedings. Again, we ensured that their initial payments under the TME would not be at risk in doing so. Whatever customers had they kept, without any risk throughout the operation of the TME.
The Central Bank has not and does not require the signing of a confidentiality clause and/or an NDA where a customer receives an award of redress and compensation pursuant to the TME. However, outside of the TME, we are aware of instances where customers and lenders have entered into settlements of litigation, some of which have contained these types of clauses.
Settlements of litigation proceedings are entirely voluntary and are generally entered into by all parties of the dispute with the benefit of legal advice. There are many reasons why persons involved in proceedings might want to keep a matter private and the terms of settlements of court proceedings are entirely a matter for the parties involved to agree between themselves. The Central Bank has no jurisdiction to interfere with or dictate the terms of private agreements that have been reached with the benefit of legal advice and the consent of both parties to settle litigation proceedings outside of the TME.
However, from a regulatory perspective, the use of these types of clauses does not prevent scrutiny by the Central Bank. Since the completion of the supervisory phase of the TME in 2019, the Central Bank continues to monitor the outcomes of complaints, appeals and court cases. Through our monitoring, we have ensured that where such settlements do arise and could have a broader impact for other customers, then we have required lenders to provide the same benefit to other customers. The use of confidentiality clauses and/or NDAs has not been and will not be an impediment to our regulatory scrutiny of these issues.
(On Former Financial Services Ombudsman) Joe Meade's comments in the programme
Prior to the TME, the Central Bank intervened with a number of lenders over the 2008-2015 period in relation to tracker mortgages, including requiring certain lenders to offer affected customers the right to return to a tracker rate and/or payment of redress and compensation. This intervention with lenders took into account a small number of individual tracker-related findings which were issued to the Bank by the FSO. In the lead up to and throughout the TME, the Central Bank engaged with consumer groups and the FSO to inform our work.
TME Appeals Process
The TME Framework was designed to deliver redress and compensation to broad-based customer groups. However, given the differing experiences, individual circumstances and many different ways in which customers were impacted, it was never going to be possible for the TME Framework to account and compensate for all of the unique circumstances that were specific to individual accounts. This is why the Central Bank required lenders to establish an independent appeals process, and why it preserved the rights of customers to bring their individual cases before the FSPO and/or the courts whilst protecting any initial awards of redress and compensation.
The independence of the Appeals Panels - of both the lender and the Central Bank -was deemed critical for their credibility. As such, the Central Bank cannot intervene in Appeals Panels’ decision making but is monitoring the progress and outcomes from the appeals.
Sanctions against individuals
The Central Bank made a public commitment at the outset of the TME to forensically examine the conduct of firms and individuals in respect of the matters identified as part of the TME and to take enforcement action where warranted and where the evidence existed to support such actions. Significant investigative work was undertaken by the Central Bank in respect of the issues identified by the TME in respect of both the lenders and the individuals who were involved in or had responsibility for those issues. This work resulted in criminal reports being made to the relevant authorities, the imposition of significant fines, totalling nearly €279m, on 7 lenders and the referral of a case against a person concerned in the management of a lender to a full inquiry.
KBC BANK
While KBC Group does not comment on individual cases, we acknowledge with regret the role we played in the management of tracker mortgages. We recognise that we fell short of the standards our customers rightly expect. We want to sincerely apologise again to all KBC customers who were impacted.
Where settlements were arrived at with customers, these reflected a recognition of the personal impact experienced. KBC and its customers agreed to maintain confidentiality, which is a standard feature of final settlements.
Although KBC exited the Irish market in 2022, we continue to take our responsibilities to customers very seriously and maintain a dedicated team that is available to provide support where needed.
The management of tracker mortgages is a regrettable period in Irish banking and for impacted customers, and one from which we have learned important lessons. The Central Bank of Ireland’s enforcement investigation identified regulatory breaches, for which we accepted responsibility. We again express our regret for the impact of these events on our customers.
AIB
We profoundly regret the Tracker Mortgage failures for which the Group was fined in 2022. We reiterate our unreserved apology for the impact on our customers’ finances and their lives.
The Tracker Mortgage Examination was by far the most complex and rigorous remediation programme ever conducted by the Group as it sought to comprehensively redress and compensate all impacted customers. We have undergone a major transformation programme in the years since the identification of the Tracker Mortgage failures. And we have undertaken several initiatives aimed at rebuilding trust and confidence with our customers, including:
- Embedding Customer First as one of our three strategic priorities
- Providing ongoing comprehensive training for our colleagues to ensure a customer first culture
- Ongoing participation in the Irish Banking Culture Board (IBCB) with an AIB executive contributing at Board level. Last year’s IBCB’s Eist survey of the public found trust in retail banks in positive territory for the first time
- Appointing a Chief Customer Officer to our Executive Leadership Team
- Embedding the Senior Executive Accountability Regime framework
- Providing 24/7 fraud support if our customers have fallen victim to financial crime
- Delivering a dedicated helpline to support vulnerable customers and carers on 10,331 calls last year
We remain determined to continue to be a positive economic and social force in Ireland and will continue to deliver on our Customer First strategic priority
In relation to the particular customer group you asked about:
- We had included this group of c.5,900 customers in the scope of the Tracker Mortgage Examination.
- The Financial Services and Pensions Ombudsman (FSPO) issued a final binding decision in relation to one of these customers, awarding a 12% write down on the capital balance of the customer’s mortgage and a refund of the interest on the amount written- down.
- We did not appeal this FSPO decision and moved quickly to apply it to all other customers in that group.
We reiterate our unreserved apology to these customers.
BANK OF IRELAND
We sincerely apologise to John and Claire O’Leary, and we fully acknowledge and regret the failings and delays in how they were treated.
What occurred with tracker mortgages was unacceptable - it should never have happened and we deeply regret that it did. We have made changes and improvements to ensure we do better for customers, including enhancements in governance, products, processes and complaints.
Where a mortgage is sold as part of a portfolio sale - in this case in 2023 - there is no change to the terms and conditions of the customer’s loan and no change to their consumer protections under the statutory codes of conduct.
PTSB
The tracker controversy was a shameful period in Irish banking history which caused significant distress for the customers of banks across the sector, including PTSB customers. PTSB has acknowledged and apologised for the errors for which it was responsible, and for the harm and distress caused to customers as a result. In addition to addressing the situation for individual customers, PTSB admitted regulatory breaches and accepted a reprimand and fine from the Central Bank of Ireland. Since that time, the bank has made significant progress in enhancing its culture and delivering for its customers, and this will continue to be a priority moving forward.
As part of any mediation process, an independent and impartial third-party is agreed and appointed by all parties to facilitate the mediation, and assist in achieving a satisfactory resolution. All parties enter into mediation on a wholly voluntary basis. As required by the Mediation Act 2017, mediation is a confidential process, and as such, confidentiality clauses are commonplace in mediation agreements.
ULSTER BANK OWNER ULYDIEN DAC
Ulster Bank Ireland DAC has admitted significant breaches relating to tracker mortgages. As a consequence of these breaches, the Bank was sanctioned and paid a fine to the Central Bank of Ireland.
The customers affected have received redress, compensation and account balance adjustments.
The Bank has apologised to customers for the impact that our handling of the tracker mortgage issue has had on them and their families. These customers placed their trust in us, and we regret the impact our failings have had on them.
Ulydien DAC re-iterates this statement of regret and apology to Caitriona and John Redmond.
