Central Bank inquiry made ‘fundamental errors’ in former PTSB chief tracker mortgage case

A tribunal has confirmed that former PTSB chief executive David Guinane has won an appeal against a Central Bank of Ireland inquiry sanctioning him for a role played in the State’s tracker mortgage scandal. The Irish Financial Services Appeals Tribunal (Ifsat) said that the sole member of the inquiry, Peter Hinchliffe, made errors of law that were so fundamental that they negated his decision last year that Guinane be fined €80,000 and reprimanded. Ifsat referred to its conclusion in a document published on its website, in which it set out reasons why it still needs to be referred to the High Court for confirmation. It said that it intends also to seek guidance and directions from the High Court on publication of its decision. The tribunal concluded that Hinchcliffe “erred in law”, acted beyond what was established by case law elsewhere, “failed to give fair notice of certain issues”, and “failed to give reasons for his decision”. It referred to Hinchcliffe by his role, rather than by name. READ MORE“Moreover, it held that the errors of law in the inquiry decision were manifest from the text and were fundamental so as to deprive the decision of its basis,” said the tribunal, chaired by chaired by former Supreme Court judge John MacMenamin. The Irish Times first reported on the conclusion of the appeal last month. “The decision has unfortunately already received some coverage in the national media, although limited in nature,” Ifsat said. “The Tribunal respectfully hopes that the High Court may be in a position to indicate that it does not see any obstacle to very early publication.”[ Former PTSB chief wins appeal over tracker mortgage sanctionOpens in new window ]Ifsat said that the Central Bank should pay Guinane’s legal costs for the inquiry and appeal, including his €5,000 appeal fee. If both sides cannot agree on the amount, costs can be referred for formal adjudication by a legal costs adjudicator.It rejected an application by PTSB, a notice party in the case, for costs. PTSB had already agreed in 2019 to pay a €21 million fine for its role in the industry-wide tracker mortgage scandal. Ifsat’s conclusion marks another major setback for the regulator’s post-crisis vetting and enforcement activities.Ifsat was previously highly critical in 2024 of a Central Bank refusal to approve a board nominee for a fund, saying the decision-making process was “flawed” and denied the individual fair procedures “at every stage”.The Central Bank was also found in a High Court ruling, published in April, to have badly handled an enforcement investigation into a funds industry executive, saying it was “irretrievably tainted” by errors. The bank committed to learning lessons and changing procedures as a result of both cases.Why is motor insurance so expensive in Ireland?Hinchliffe emphasised in his decision last year there was “no finding of dishonesty against Mr Guinane” and that he “did not form an intention to harm or take advantage of customers”. Guinane was also entitled to receive better support from within the wider Irish Life & Permanent Group, of which PTSB was a part at the time, he added.The inquiry centred on a special condition in some PTSB tracker mortgages offered during the pre-crash property boom. This required customers who moved for a period to a fixed rate to instruct the bank afterwards to put them back on a tracker rate or another fixed product. Otherwise, they would default to a standard variable rate.The ambiguous wording of the condition led to questions in early 2009 about whether a customer opting to go back on to a tracker rate was entitled to their original margin over the European Central Bank rate, or a higher margin then on offer from PTSB.The bank adopted a strategy in January 2009, on the basis of legal advice, to only put customers who requested the original rate – or complained – on the more favourable rate. The Central Bank said Guinane signed off on the strategy when he responded to the plan, when advanced by a colleague via email in January 2009, with the words, “okay to that”.The Ifsat decision raises questions about whether the Central Bank will still go after other bankers suspected of having played a role in the tracker mortgage scandal. Guinane, the only individual pursued by regulators so far, claimed at an inquiry hearing in 2024 that he was being made a “scapegoat” for the industry scandal.