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Andrew Tyrie questions FSA over Bank of Ireland rate hike

Treasury select committee chair Andrew Tyrie is pushing the FSA over what action it is taking in response to the Bank of Ireland rate hike on tracker mortgages.

Andrew Tyrie 480

In a letter addressed to FSA managing director Martin Wheatley, published today, Tyrie says he is “concerned” about the increase and questions whether it amounts to misselling.

Last week, the Bank of Ireland wrote to 13,500 buy-to-let and residential customers on tracker mortgages to warn them of plans to more than double the base rate differential it charges.

Tyrie says the bank is justifying the increase on the grounds that banks are required to hold more capital, increasing its funding costs.

The letter states: “I would be grateful if you could tell the committee what action the conduct arm of the FSA will be taking in response to the action by the Bank of Ireland.”

Tyrie sets out a series of specific questions including what contact the FSA had with the bank and at what level, whether there will be an investigation into unfair clauses in the mortgage contract and whether it amounts to misselling.

He also wants to know what analysis has been made for affected customers, what contact the FSA has had with the Financial Ombudsman Service and how many other lenders may increase tracker rates in a similar way.

Wheatley is due to respond on Monday.


Mervyn King defends FLS after lending drop

Bank of England governor Sir Mervyn King says the funding for lending scheme has achieved its central objectives despite a “disappointing” drop in net lending. Speaking to the Parliamentary Commission on Banking Standards today, King said the scheme had cut the cost of funding for banks and stopped lending levels being much worse than they […]

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