The fallout from the decision to place Irish Bank Resolution Corporation into special liquidation in February 2013, continues with mortgage borrowers who comprise the €1.8bn IBRC mortgage book facing an uncertain future. There are mixed messages coming from Minister for Finance Michael Noonan as to the fate of the IBRC mortgage book, but indications are that the special liquidator will attempt to sell it in one job lot.
However individual mortgage borrowers with grievances with IBRC are finding that the Financial Services Ombudsman, led by understated US-born William Prasifka (pictured, above), is refusing to proceed with investigations of complaints which involve IBRC. Here is a recent letter from the Ombudsman to an IBRC mortgage borrower with personal details redacted.
However in the Dail, Minister Noonan is maintaining that the special liquidation does not prevent investigations of complaints into IBRC by the Ombudsman. The Sinn Fein finance spokesperson Pearse Doherty asked Minister Noonan if the Ombudsman could now investigate complaints and was told “the Financial Services Ombudsman is not precluded from investigating complaints by mortgage holders against the former IBRC” but the Minister also said that the Ombudsman was independent in how he discharged his duties.
So, here we have the minister of the day holding one opinion on the legislation used to liquidate IBRC and we have the Ombudsman holding another. And in the middle is the mortgage borrower who can’t progress their complaint. This is the sort of mess that gives public administration a bad name.
The full parliamentary question and response are here.
Deputy Pearse Doherty: To ask the Minister for Finance if he will confirm that the Financial Services Ombudsman, due to the Irish bank Resolution Corporation Act 2013, cannot now investigate complaints by mortgage holders against the IBRC; and if he will make a statement on the matter.
Minister for Finance, Michael Noonan: Firstly, I must point out that the Financial Services Ombudsman is independent in the performance of his statutory functions and it would not be appropriate for me to comment on how he performs those duties.
The Irish Bank Resolution Corporation Act 2013 was passed on 7 February 2013. Pursuant to the provisions of the Act, I made a Special Liquidation Order for the purpose of winding up IBRC.
Section 6(6) of the Act specifically provides that the making of a special liquidation order does not preclude any investigation by certain authorities, including authorities which may investigate any person under or by virtue of any enactment, rule of law or contract. The Financial Services Ombudsman investigates complaints by eligible consumers in respect of certain conduct by regulated financial service providers pursuant to part VIIB of the Central Bank Act 1942.
Therefore, I have been advised that the Financial Services Ombudsman is not precluded from investigating complaints by mortgage holders against the former IBRC due to the new Act.
As I mentioned, the Financial Services Ombudsman is independent in the performance of his duties and I understand that he may have taken a more restrictive interpretation of the Irish Bank Resolution Corporation Act 2013 provisions.