Ex-Permanent TSB CEO to Challenge Central Bank Fine and Reprimand

David Guinane, the former CEO of Permanent TSB, is contesting a Central Bank ruling that imposed an €80,000 fine and a public reprimand. This penalty stems from his involvement in the management of tracker mortgages during the 2008 financial crisis.

Details of the Appeal Against Central Bank Ruling

Peter Hinchliffe, a UK barrister, presided over the inquiry. He determined that Guinane failed to ensure PTSB acted in the best interests of its customers. However, he noted there was no evidence of dishonesty on Guinane’s part. Hinchliffe stated that Guinane did not intend to harm customers and deserved better support from the Irish Life & Permanent Group.

Expressing his frustrations, Guinane described feeling “scapegoated” by the Central Bank. He believes the inquiry’s findings are incorrect and plans to appeal the decision in January and February. He emphasized that the inquiry indicated he did not intentionally act wrongly.

Background of the Inquiry

The inquiry focused on potential regulatory violations between January 2009 and April 2010. During this period, PTSB provided a low tracker rate to customers only after they made specific requests or complaints. The inquiry concluded that PTSB did not extend favorable rates to customers who did not actively inquire.

• PTSB ceased offering tracker mortgages in July 2008.
• The decision aligned with rising funding costs amid the financial crisis.
• Public hearings for the inquiry took place early last year.

Key to the inquiry was a particular clause, known as special condition 706, linked to the first tracker mortgages offered by PTSB in 2004. This condition required customers who shifted to fixed rates to inform the bank to resume a tracker rate. If they failed to do so, they reverted to a standard variable rate.

Controversy Over Customer Treatment

In early 2009, legal guidance influenced PTSB’s strategy to only allow customers who communicated directly with the bank to access their original rates. The Central Bank asserts that Guinane endorsed this approach by responding affirmatively to an internal email about the policy change on January 19, 2009.

This decision reportedly violated the Consumer Protection Code of 2006, which mandates that financial institutions prioritize customer welfare. As Guinane prepares for his appeal, the broader implications for Permanent TSB remain under scrutiny.