Claims against David Guinane, former chief executive of Permanent TSB (PTSB), regarding his involvement in an alleged unfair treatment strategy of tracker mortgages 15 years ago have not yet been substantiated. Thomas Hogan SC, Guinane’s solicitor, claims no evidence has been presented to support borrower complaints, making it impossible to make a finding against the bank in a public inquiry.
The accusation results from an ambiguous clause found in the boom-era documents for PTSB tracker loans. This clause stated that customers, who’d moved temporarily to a fixed-rate, needed to instruct the bank to revert to a tracker rate, or their rate would default to a variable one.
Debate around the clause arose in early 2009, questioning whether customers could reinstate their tracker rate based on the original margin of the European Central Bank rate, or a raised margin proposed by the bank. Consequently, the bank took a strategic decision in 2009 to only reinstate the favoured rate for customers who requested it specifically or lodged a formal complaint.
PTSB addressed customer compensation requests and complaints about biased treatment in 2010 as per the regulator’s instruction. A total of €1.2 million was paid out to 234 customers, addressing issues dating back to 2005.
Hogan stated that no evidence has surfaced about customers being affected between January 2009 and April 2010. Allegations have been made that Guinane failed to act in the customers’ best interest, going against a consumer protection code during this period.
The Central Bank suggests that Guinane gave the go-ahead for the strategic decision with his email response, “ok to that” in January 2009. This email was a reply to a colleague proposing that only customers contacting the bank would be able to go back to their original rate.
Representing the Central Bank’s enforcement team at the inquiry, Ailbhe O’Neill SC pointed out the shifting interpretations of Guinane over time about the meaning of the aforementioned email.
Ms O’Neill emphasised that in 2017, during an investigation into the bank’s conduct, Mr Guinane expressed the view that the 2009 decision to offer a selective advantageous tracker rate was inequitable. Yet, when later facing personal scrutiny in 2019, his stance shifted, O’Neill pointed out. Previously, the Ex-CEO testified, he can’t recall the specific circumstances around the decision taken 15 years prior, but upon revisiting paperwork, he interpreted the correspondence as implying any client transitioning from a fixed rate would revert to their initial rate.
Ms O’Neill contested the idea that Mr Guinane, as the CEO, couldn’t have been aware of or comprehended the bank’s activities. Conversely, Mr Hogan highlighted that the finalization of the plan in question occurred in early February, spearheaded by other bank members in possession of intricate knowledge concerning the matter and comprehensive in-house legal guidance, information which was never disclosed to Mr Guinane.