David Guinane, previous chief executive of Permanent TSB (PTSB), refuted claims on Thursday of endorsing a preferential customer treatment policy when a procedure was established in 2009 for managing certain tracker-mortgage clients.
During a probe into allegations that he was involved in a potential regulatory transgression between January 2009 and April 2010, Mr. Guinane spoke. The allegations included him failing to maintain a key principle of the 2006 Consumer Protection Code by not acting in the best interest of the bank’s customers.
The investigation is focused on a particular clause in Permanent TSB’s tracker loan documents from the property boom era, commonly referred to as special condition 706. Unless the bank received instructions from the customers coming off this fixed rate to resume their tracker rate, the clients’ loans would automatically switch to a standard variable rate.
The clause’s vague language raised doubts in early 2009 about whether clients wishing to move back to a tracker rate following a fixed period were entitled to the initial margin over the European Central Bank rate or a greater margin proposed by the bank.
Niall O’Grady, the marketing head of PTSB at the time, suggested to Mr. Guinane on the 16th of January, 2009, that only if customers contested being put on a higher margin or explicitly asked for the original margin should they be granted the more beneficial rate. Mr Guinane sent a response after receiving an additional email three days later, saying ‘ok to that’.
Mr. Guinane articulated in his inquiry earlier this week that he does not recall seeing the email or any general contemplation of the issue when it surfaced fifteen years ago.
During cross-examination by Ailbhe O’Neill SC, representing the Central Bank’s enforcement, Mr. Guinane clarified on Thursday that he interpreted this email to imply “any customer” transitioning from the fixed rate would “return to their original rate”.
He also acknowledged that the bank did not go ahead with the decision he was in favour of.
In 2022, Ms O’Neill drew attention to a letter sent to the Central Bank by Mr Guinane’s lawyers, asserting that the ex-banker would have been required to put together his own alternate plan to the one depicted in the email from 16th January 2009, in order to guarantee all clients switching back to a tracker mortgage reverted to their initial rate. Ms O’Neill suggested that this stance is completely consistent with his belief that all such clients should return to their original rate.
Nevertheless, Mr Guinane maintained that his present evidence is based on a thorough review of all pertinent documents he obtained through the disclosure process inherent to the investigation.
The final legal arguments in connection with this case are set to happen at the end of the approaching week.
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