Doherty concerned at AIB policy on ‘break fees’
Sinn Féin Finance Spokesperson Pearse Doherty TD has said he is deeply concerned that AIB’s interpretation of the Mortgage Credit Directive on break fees is not in line with the approach taken by other banks and indeed not in line with the spirit of the Directive itself. He has written to the Central Bank seeking urgent clarification.
The Donegal TD said:
“It has been brought to my attention that AIB seems to be interpreting new rules under the Mortgage Credit Directive in a way that means consumers are losing out relative to customers at other banks. The Directive allows a borrower to ‘break’ out of a higher fixed rate and move to a lower one on offer with the banks only allowed charge the cost of the move.
“Most banks interpret this cost as meaning the cost of funds which in the era of zero percent interest rates can be nominal. AIB, however, have interpreted the directive as allowing them to charge the full lost income to them of the move.
“When I questioned the Minister for Finance on AIB’s interpretation, I was simply sent back a defence of AIB’s policy by AIB. That is not acceptable. I have today written to the Central Bank outlining my concerns.”