Politicians on the Oireachtas Finance Committee have urged the Government to question the directors of AIB in the wake of its record fine for tracker mortgage regulatory breaches.
ast week the bank and its EBS subsidiary was hit with a record €97m fine for its role in the tracker mortgage scandal.
Some customers lost their homes and others were overcharged for years.
The Central Bank said the bank’s failings had caused unacceptable harm and loss to affected customers over nearly 18 years.
It said tracker mortgage regulatory breaches occurred up to March this year.
Paschal Donohoe was told by TDs on the Oireachtas Finance Committee he should ask the board what role it played in stopping the harm to tracker customers before he approves their reappointment at the annual general meeting of the bank.
The Finance Minister has a major role in the reappointment of directors to the board at each annual general meeting because the State has a majority shareholding in the banking group. This fell to 63.5pc this week, from 68.5pc, after share sales.
Committee chairman John McGuinness, of Fianna Fáil, and Sinn Féin finance spokesman Pearse Doherty called on the minister to quiz the board of directors of AIB about the tracker scandal.
Mr Doherty questioned what role the current directors played to ensure the tracker regulatory breaches stopped, given the issue was going on for years and families had lost their homes.
“I think it is important to find out if the current directors were involved when people lost their homes and what efforts the directors were taking, given that the regulatory breaches were continuing up to eight weeks ago,” the Sinn Féin TD said.
He called on Mr Donohoe to consider whether it would be appropriate for him to use his voting rights to reappoint those directors due for re-election at the next bank annual general meeting.
As many as 21 family homes were lost due to the tracker breaches by AIB.
A total of 13,000 customers were affected.
The Central Bank accused AIB of putting its interests ahead of those of customers.
Mr Donohoe told committee members he held the management of the bank over the past few years responsible for the tracker breaches.
“The matters we are discussing here are primarily the responsibility of the management of the bank, and that has been made clear by the regulator,” he told the committee.
The minister said he had reappointed directors he considered to be doing a good job at the bank.
But he regarded what happened to the 13,000 tracker customers as “an absolute scandal”.
He said the scale of the fine showed the seriousness with which the Central Bank treated the issue.
But committee chairman John McGuinness said the fine was “a pittance in the world of banking”.
He said there were 1,000 more tracker cases to be resolved across all the banks.
“The banks are circling the wagons and protecting themselves. They are not working to put an end to the tracker mortgage issue,” he said.
He accused the Central Bank of being “soft” on the banks in relation to the tracker mortgage issue. He said the culture of the banks had not changed.
AIB is chaired by Jim Pettigrew, who was chair of Scottish Financial Services, the Scottish financial services trade body.
He also served as co-chair of Scotland’s Financial Services Advisory Board (FiSAB) with Scotland’s first minister and is a former president of the Institute of Chartered Accountants of Scotland.
More than 41,000 borrowers were affected by the industry-wide tracker debacle going back to 2008. Banks have set aside €1.5bn of provisions in recent years in relation to the tracker scandal.
