Central Bank of Ireland developed methodology for broader examination of tracker mortgage-related issues

DUBLIN, 23-12-2015 — /EuropaWire/ — Following on from the Central Bank’s statement published on 2 October, and our engagement with a number of consumer groups and the Financial Services Ombudsman, the Central Bank has now developed the methodology for the broader examination of tracker mortgage-related issues.

The Central Bank has written to all relevant lenders requiring them to put in place a robust plan and framework to carry out the review, including having the appropriate governance and controls in place.

Lenders must also appoint independent third parties to provide assurance to the Central Bank on the adequacy and appropriateness of their reviews.  These plans and frameworks are to be in place by the end of March at the latest.

The Examination covers all lenders which offered tracker mortgages to customers, including both for the family home and investment properties from when the lenders started to offer such mortgages, up to the end of 2015.

The purpose of this latest tracker mortgage Examination is to identify any cases where:

  • customers’ contractual rights under the terms of their mortgage agreements were not fully honoured;  and/or
  • lenders did not fully comply with the various requirements and standards regarding disclosure and transparency for the customer.

The Examination requires lenders to carry out a review in order to identify customers who have been negatively impacted and, where there has been any detriment, to provide redress in line with redress principles determined by the Central Bank.

We have also prescribed the information, which lenders will be required to submit to the Central Bank, to enable us to oversee the reviews being conducted.

It is important that each lender carries out a comprehensive and robust review, which achieves a fair outcome for all customers. In setting out the terms of reference for the examination, while the Central Bank wants to have the Examination completed as soon as possible, we also recognise that this is potentially a significant undertaking for lenders and it is important that they are given the necessary time to complete it.

The Central Bank expects significant progress to be made by all lenders before the end of 2016 and will provide a further update in April.

SOURCE: Central Bank of Ireland

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