Letter published from FCA on Bank of Ireland tracker mortgages

08 July 2013

The Treasury Select Committee has published a letter from the Chief Executive of the Financial Conduct Authority, Martin Wheatley, regarding the decision of the Bank of Ireland to increase the rate of some of its tracker mortgages.

The previous letter from Andrew Tyrie to Martin Wheatley, which has already been published, is also attached.

The Chairman of the Treasury Select Committee, Andrew Tyrie MP, said:

It is clear that the regulator was concerned about the action taken by the Bank of Ireland.

A small number of customers were belatedly granted a reprieve as a result of a review of their cases. Most were not.

All of the mortgages were sold before 31 October 2004. As a result, the FCA has no jurisdiction over them. Its options for taking action were therefore severely limited. Furthermore, under current rules, it still has no jurisdiction over any mortgages covering buy-to-let properties.

This is largely an issue for the FOS. The Treasury Committee will look closely at its ruling.

The FCA has not made clear what its position would have been had these mortgages been sold after October 2004.  It would be helpful if it did so.

The FCA also does not think any other banks have imposed similar clauses allowing the lender to increase the differential between the base rate and a tracker rate.  It should check that this is indeed the case.

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