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Wheatley to Tyrie: FSA has ‘no concerns’ over BoI rate hike


Financial Conduct Authority chief executive designate Martin Wheatley says the regulator does not have “any concerns” about the Bank of Ireland’s rate hike on its tracker mortgages.

In February, the Bank of Ireland revealed it is more than doubling the rate for 13,500 borrowers on its tracker mortgages, some 7 per cent of its borrowers.

Around half of those affected are buy-to-let borrowers who will see rates increase from 1.75 per cent above base rate to 4.49 per cent above base on 1 May. Residential borrowers will see their rates rise in two stages, firstly to 2.49 per cent on 1 May and then to 3.99 per cent on 1 October.

The bank blames the rise on increasing capital requirements.

On 8 March, Treasury select committe chair Andrew Tyrie wrote to Wheatley expressing concern at the move and asking if it amounts to misselling or unfair contract terms and what action the FSA is taking.

In his response, dated 12 March but only published today, Wheatley says the sale of these mortgages are outside of his remit as they were completed before 2004 regulations. But he says he was pre-warned about the move and spoke to senior Bank of Ireland managers.

He says: “We currently have no plans to treat this as a prima facie case of misselling. We have reviewed the terms and conditions provided to us by the Bank of Ireland UK and did not identify any concerns which led us to believe the terms may be unfair.”

He adds: “However, only a court may determine whether a term is unfair under the regulations. If a customer is eligible and complains to the Financial Ombudsman Service, it may come to its own view about what may be fair and reasonable.”

On 21 March, Tyrie wrote again to Wheatley accusing him of not addressing the main issues and demanding further answers.

He wrote: “Your response does not tell the committee whether you were concerned at the action of the Bank of Ireland, what assessment you have made of the impact of its decision on the rest of the industry, nor how the FCA would act in the event of lenders taking this sort of action on the future.”

Tyrie wants to know whether customers were clearly aware of the possibility of a rate hike when sold the deal and which other lenders have approached the FCA with planned rate hikes

Wheatley says Bank of Ireland analysis shows 94 per cent of the affected mortgages are below 75 per cent loan-to-value and are approximately 10 years old.

Bank of Ireland customers can remortgage without early repayment charges, including any charges connected to extra borrowing. It is also considering measures to help borrowers already in arrears.


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. one thing is for certain. Wheatley would not have taken this stance without the approval of the chancellor. Ironic really.

  2. Maybe the mortgages were sold before the FSA regulated them.

    But then why did the FSA spend all that money on a JR over pre-regulated PPI sales?

  3. Christopher Wild 29th March 2013 at 12:09 pm

    Time for these mealy mouthed officials in the FSA to stand up and be counted. The simple facts are that since time immemmorial the mortgage rates more or less “tracked” BoEBR.
    Cunning Lenders Lawyers’ have looked closely at the literal wording in the Mortgage Contracts entered into freely all those years ago and have decided that they are capable of being reinterpreted in favour of the Lender, in this case Bank of Ireland to “jack up” their margins hugely at the expense of the unfortunate borrowers.

    My own view is that this is a clear case of miss -selling and that all the borrowers affected by this BoI skullduggery should each chip a few quid into the kitty and sign up for a Class Action Lawsuit in the Courts if the FSA Government lapdog hasn’t got the cojones.

    This case could easily go the way of the PPI scandal, the badly set up Interest Fixing Scheme by the Banks and one or two other half baked finacial schemes the Banking and Mortgage Lending Industry is responsible.

  4. TCF was another invention at the FSA with the sole aim of persecution of small IFAs
    It was never aimed at the banks
    After all this idiot will join a bank after he has filled his boots at FCA or whatever it will be changed to in a few years so he can never take them on – they are his future employers!

  5. RegulatorSaurusRex 29th March 2013 at 4:00 pm

    No wonder I’m extinct!

  6. Politely saying that we are not interested in what you say TSC unlike Sants who was just rude.

    What a customer focused new regulator we have.

  7. George Williamson 30th March 2013 at 8:47 pm

    Looks like TCF has been re-badged as “Treating Customers Flippantly”!

    Mr Wheatley – time to resign – if you allow BOI to get away with this, then there is no point in the existence FCA.

    I would also ask the industry to understandthat a failure to act on this blatant rip-off means that FCA now stands for “Frantically Conning Anyone” as this is what they are allowing banks to do.

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