Prof Kieran McEvoy
Prof Kieran McEvoy wrote a feature article in The Guardian newspaper addressing key issues related to dealing with the past in Northern Ireland concerning viability of an amnesty for soldiers and its relationship to truth recovery.Visit Website
Prof Kieran McEvoy
Prof Kieran McEvoy wrote a feature article in The Irish Times, the most respected broadsheet newspaper in Ireland on the role of lawyers and law in dealing with the past in Northern Ireland.Visit Website
Prof Kieran McEvoy
Prof Kieran McEvoy wrote a feature article on the legality of amnesties in dealing with the past and implications of same for the peace process for the Belfast Telegraph.Visit Website
Prof Kieran McEvoy
MPod podcast episode by Prof Kieran McEvoy on ‘Transitional Justice: Definitions, Approaches and Apologies.’ Prof McEvoy was invited by the postgraduate team at the Senator George J. Mitchell Institute for Global Peace, Security and Justice to talk on transitional justice and apologies in societies transitioning out of violent political conflicts. The outcome of the podcast was that more students could engage with McEvoy’s teaching outside the classroom. It opened up knowledge on transitional justice to non-academic audiences beyond the university.Visit Website
Blog: Apologies and Historical Institutional Abuse: Emotion and Forgiveness in the Narrative of Remorse
Professor Anne-Marie McAlinden
The question of what constitutes a ‘legitimate’ apology – for victims/survivors as well as the general public – has perhaps never been more timely. There are many examples of high-profile state apologies for historical wrongs, such as those by Bill Clinton, Kevin Rudd and David Cameron on behalf of their respective nations for slavery, ‘the Stolen Generations’ and ‘Bloody Sunday.’ More recently, in relation to sexual violence and historical abuses in particular, we have seen a cultural outpouring of apology surrounding the global #MeToo! and #TimesUp! movements. This has given rise to the phenomenon of ‘over apologising’ and the follow-on question of what makes an effective or sincere apology?
In this respect, there is an acknowledged difference between saying ‘I am sorry’ and apologizing. Fulsome apologies, when constructed and delivered in conjunction with affected communities, and in particular survivors, may provide an effective means for states and institutions to engage with past wrongdoing. While there is a vast inter-disciplinary literature on what constitutes a legitimate apology, at its most basic level, it is generally agreed that an apology involves specific acknowledgement of responsibility for wrongdoing and an unequivocal expression of regret.
Others emphasise that the future-focused aspects of the apology – in terms, for example, of the promise of non-repetition or the offer of tangible reparations – are equally as important to addressing past wrongs. Indeed, apology very much emerges as a process, rather than a single, one-off event, where how the apology is constructed and delivered is just as important as what is actually said.
The primary data emerging from our fieldwork (including in-depth semi-structured interviews with victims/survivors and apologisers) within the case study of historical institutional abuse supports these assertions. A number of themes have emerged in relation to the construction of a true and effective narrative of remorse. These core themes which have emerged from our initial analysis of the fieldwork data also resonate with the broader theoretical notions of this project, including truth; accountability; legitimacy and audience; and reconciliation and follow-through.
First, the outward display of sincere emotion on the part of the apologiser is important for many survivors in terms of verifying the perceived authenticity of the apology. Addressing the emotional dimension of harm is an established element of restorative justice. However, there are differences of opinion as to whether, empathy, remorse, guilt or shame is the primary emotion at play within restorative processes, including apology. For many survivors, a visible and outward expression of emotion by the apologiser is pivotal to an apology as it maximises the opportunity to convey genuine remorse and empathy for them and their suffering and demonstrates engagement at a basic human level.
At the same time, ‘shame’ and the acceptance of ‘blame’ have also been key to many of the official apologies by the Irish State and the Catholic Church in the aftermath of historical institutional abuse. One of the most notable here perhaps is the apology delivered by then Irish Taoiseach Enda Kenny in February 2013, following the publication of the McAleese Report into state involvement in ‘Magdalene Laundries’, where he was visibly moved to tears. During the apology delivered in Dail Éireann, Kenny, in accepting the State’s direct involvement in the Magdalene regimes, references the ‘nation’s shame’ multiple times and acknowledges the women as ‘wholly blameless.’
Some survivors, however, do not want an apology as no words can ever make up for the depth of their suffering and its long term consequences. For this group of survivors, therefore, anger remains the overriding emotion stemming not only from the physical, sexual or emotional abuse or neglect they suffered but from the long-standing failures of Church and State to acknowledge these abuses or indeed their institutional cover-up.
Second, in tandem with restorative thinking, the ‘ritual’ of apology and forgiveness can also be an important means of managing ‘shame’ for both victims and perpetrators. On the one hand, apologies may validate victims’ suffering by acknowledging that they were gravely wronged. On the other hand, apologies, by the acceptance of responsibility by the perpetrator, or their representatives, may reduce some of the external and internal blame surrounding the wrongdoing.
The language of repentance, forgiveness and redemption pervaded some of the interviews with both victims/survivors and apologisers. It is important to acknowledge, however, that while asking for a forgiveness is a feature of many Church apologies for historical institutional abuse, within a true and abject apology, forgiveness can never be demanded but rather has to be earned and freely given.
Apologies may also be important at a collective level when addressed to society at large in terms of restoring the dignity of victims. It is here that the backward and forward looking elements of an apology come into play. Apologies should ideally express regret for past wrongdoing as well as promise that things will be different in future – culturally as well as institutionally – so that the abuses will not be allowed to happen again. In this sense, apologies directed at multiple audiences (including survivors, other religious, wider society) have perhaps the most potential to fulfil these twin elements.
Both the apology delivered by Enda Kenny mentioned above and Pope Benedict XVI’s Pastoral Letter to the Catholics in Ireland in March 2010 are examples of apologies directed at multiple internal and external audiences. Both to varying degrees addressed the issue of wrongdoing stemming from historical institutional abuse including the level of State and Church involvement in sustaining the abusive regimes. However, they were criticised as lacking a fuller acknowledgement of institutional complicity in the abuses and the lack of appropriate follow-through in terms of providing reparations and truth for victims/survivors.
In this respect, apologies on their own, may not be enough to address historical institutional abuse. Indeed, without appropriate and tailored wider redress mechanisms, apologies may be just empty words. Certainly, as was recommended by the Historical Institutional Abuse Inquiry in its report published in January 2017, apologies are perhaps best seen as part of a broader package of reparations. This also includes, for example, compensation, public memorialisation and a range of support services for survivors, such as counselling and enhanced access to health and social care.
Dr Muiris MacCarthaigh
Comments by government Ministers that Irish banks had a particular duty to assist the national effort to deal with the Covid-19 outbreak reflects a widespread belief that banks have a moral as well as material responsibility to assist the Irish public. And it had an immediate effect, with a range of measures being introduced to alleviate pressure on those with bank loans. Several banks have decided to award extra pay to front-line staff dealing with the public through the coronavirus crisis. Pressure on government to lift a €500,000 cap on bank CEO pay that had being building through 2019 seems to have has dissipated.
The enduring belief that domestic banks still have a debt to pay runs deep in Irish public life and can also be connected to the astonishing results of the recent Irish general election. Indeed, if it hadn’t been for the Covid-19 crisis, the ongoing uncertainty over the composition of the Irish government post-election would be dominating local headlines. The fact that the two traditional ‘big beasts’ of Irish politics – Fianna Fáil and Fine Gael – have entered negotiations to form an administration is historic. Both trace their origins to a century-old civil war split which meant that coalition was, before now, largely unthinkable.
Since 1932, no Irish government has ever not involved one of them as the main (or only) governing party. And as recently as 2007, on the eve of the financial crisis, the two parties commanded over two-thirds of first preference votes between them. This combined vote has tumbled to just over 50% in 2011, then under 50% in 2016. In the recent February 2020 election their combined first preference vote stood at 43% as Sinn Féin made a historic breakthrough, securing almost a quarter of all votes, and the Labour Party struggled in single-digits. Disaffection with the traditional parties has resulted in one of the most fragmented parliamentary systems in Europe, and experiments with alternative forms of democratic decision-making.
Exit polls for the recent election suggest that it was not climate change, or maintaining economy recovery, but rather health (32%) and housing and homelessness (26%) that voters identified as their top policy priorities when casting their vote. And here the connection to the banking crisis lies. Investment in both the health system and social housing were major casualties of the Irish response to the combined financial and economic crisis of 2008, as successive governments undertook a six-year period of retrenchment before sustained recovery in 2014. The legacy of this underinvestment continues to create major national problems, ranging from homelessness to concerns expressed by the European Centre for Disease Control that the Irish intensive healthcare system may not be able to cope with Covid-19 cases.
The scale of the crisis was in large part due to the near collapse of the Irish domestic banking system and the need for the Irish state to effectively nationalise most of the sector. The most recent official estimates put the cost of this ‘bank bailout’ to the Irish exchequer at over €40 billion, as well as in excess of €1 billion a year in interest alone.
As well as the legacy of the 2008 crisis, banks have come under fire more recently for overcharging thousands of customers in respect of mortgage products, for which they have had to pay substantial compensation. The banking sector has sought to address its poor public image, including funding a new Irish Banking Culture Board (IBCB), with banking and also external stakeholders on its board. However the backlash to the CEO of one bank suggesting that dealing with the tracker mortgage scandal was ‘annoying’ and that the Central Bank should ‘turn the page’ touched a nerve, with an apology ensuing afterwards.
It’s unclear how effective the measures undertaken by the banks to assist the national effort to tackle Covid-19 will be, or how long they will last for, but what is not in doubt is that Irish banks could do with a ‘good news’ story.
Prof Kieran McEvoy
Prof Anne-Marie McAlinden
Prof Anne-Marie McAlinden does an interview with Emilia Świętochowska from Dziennik Gazeta Prawna in Poland on historical institutional child abuse and the Catholic Church in Ireland.Visit Website
Dr Muiris MacCarthaigh is a Senior Lecturer in Politics and Public Administration at Queen’s University Belfast
Public believe banks have yet to atone for the past.
It is just over a decade since the ‘bailout’ of the Irish banking sector began in earnest in March 2009. Even now over a billion euro of public funds is required to service the annual cost of bank recapitalisation and subsequent public sector borrowings. For thousands of individuals the fallout from the financial crisis has included spiralling debt, court appearances, broken relationships, and worse. And of course the political consequences of the crisis are still unfolding. The Dáil is one of the one of the most fragmented parliamentary chambers in Europe with a large number of independent members, including some in government.
The issue of pay and bonuses within those banks that received state assistance after the 2008 crash has recently re-emerged in the public arena. The outgoing Governor of the Central Bank of Ireland recently told Minister for Finance Paschal Donohoe that that institution was now open to the idea of removing barriers to bonus awards within Irish banks introduced following the financial crisis. Several banks have been pushing for relaxation of what they consider to be commercially damaging restrictions for some time, expressing particular concern about staff retention and capacity to compete for recruitment of top executives from within as well as from outside the banking sector. British bank relocations arising from Brexit are also now invoked as part of the argument to facilitate higher remuneration by way of bonuses, even if a core pay cap of half a million euros remains in place for some banks.
Unsurprisingly, public attitudes to the banking sector in Ireland since 2008 reflect very high levels of distrust and cynicism. A report by the Central Bank of Ireland last year strongly criticised the failure of the banks’ to address this. However, the recent launch of the Irish Banking Culture Board (IBCB), funded by the five main retail banks, suggests the industry may be finally awakening to its responsibilities. For its part the government is seeking to introduce legislation to make senior bankers more directly accountable for their actions.
Questions have been raised about the independence of the IBCB given it is funded by the banks, and also its governance model which is very representative of the industry. However the Board is not the first industry-sponsored body in Ireland. The Press Council of Ireland was created in 2007 under government pressure for newspapers to self-regulate or else face statutory regulation. Its autonomy and authority have not been fundamentally challenged in the years since.
Choosing to put ‘culture’ in the title is an unusual step. The nomenclature raises obvious questions, including how to determine what is the existing culture, can it be changed and how, and who will determine such change? And is the Board itself to exist in perpetuity or is there a sunset provision for its cessation?
Modern day financial institutions operate in a number of different cultural contexts. As well as their individual market brands and proposed ethos (banks sought to differentiate themselves from competitors during the Oireachtas banking inquiry), each will have their own internal organisational cultures and values that may be difficult for outsiders to understand let alone change. And there is a wider European and international banking cultural context within which Irish banks must operate, a point they have been keen to emphasise in recent discussions over CEO remuneration and bonuses.
The findings of the IBCB’s study concerning negative public attitudes to banks and banking culture should hold little surprise. They are consistent with the findings of an island of Ireland survey undertaken as part of the ‘Apologies, Abuses and Dealing with the Past’ project by a team of researchers at Queen’s University Belfast. Conducted just prior to the tracker mortgage scandal during June and July 2017, 77% of over 1000 respondents engaged in face-to-face interviews in 100 sampling points across every county felt that the banking sector had not adequately apologised for the banking crisis.
Although several statements of regret and some apologies were given by former and current senior bankers at the Oireachtas Banking Inquiry during 2014-15, 94% of respondents were unaware of any individual bankers having apologised. In fact more people believe that protagonists involved in the Troubles and the institutional abuse scandals of recent years have apologised than the banking sector or individual bankers for their role in the 2008 crisis. The fact that the ICBC survey also found such low levels of esteem for banks suggests that the legacy of the crisis remains potent.
Respondents felt that all of the major actors in the banking crisis have been slow to acknowledge and accept responsibility for their actions and resultant harm. Moreover, very few (4%) said they felt that Irish society should “just move on” at this point.
When asked via scales what the most important measures are for dealing with the legacy of the crisis, ensuring it never happens again by means of better regulation and attitudinal change was considered the most important measure by respondents (75%) ahead of alternatives such as prosecutions (67%) and compensation (50%).
An overwhelming majority of survey respondents felt that Irish banks have not yet fully atoned for their part in the financial crisis. Different views did emerge about the utility of apologies to address this – only 40% felt that further apologies from the banking sector would help them personally, but 73% felt it would be helpful for society as a whole.
For many interviewees, the perceived absence of meaningful apologies for the crisis is connected to scepticism that banks truly want to achieve better customer relations. In the words of one project interviewee, ‘an apology is maybe only worth giving if you want to maintain a relationship with people’.
The IBCB has noble ambitions about how bank customers should be dealt with in the future, and nobody doubts that culture change is long overdue within the sector. However it should not ignore addressing the past as it seeks to plot a way forward.
Dr Muiris MacCarthaigh is Senior Lecturer in Politics and Public Administration at Queen’s University Belfast, and Co-Investigator on the ESRC-funded ‘Apologies, Abuses and Dealing with the Past’ project. An earlier version of this blog appeared in the Sunday Business Post on 9 June 2019.
Blog: Brokering Between Borrowers and Banks to Resolve Household Debt: Reflections From the Last 10 Years
Annmarie O’Connor, Business Manager, Money Advice and Budgeting Service (MABS)
This blog is based on the presentation that Annmarie O’Connor gave at the conference: The Banking Crisis a Decade On: Victim and Public Perspectives on Apologies in Ireland at the Royal Irish Academy on Thursday 27 September 2018.
It has been quite a decade for the Money Advice and Budgeting Service (MABS) and its clients. Since 2008, MABS has provided a service to nearly a quarter of a million households. The stats show a bell-shaped curve with demand rising rapidly from 2008 then reaching a peak between 2010 and 2013 at roughly 27,000 clients per annum, before levelling off to about 20,000 a year in the years since. Similar numbers called our MABS Helpline each year and we are currently referring about a third of all callers for face-to face support in one of 65 MABS offices nationwide.
I am not an economist, a lawyer, a regulator, a policy maker, a journalist or an academic. In MABS we do money management and debt advice. My experience and observations are wholly limited to what I see in MABS casework. I don’t work on the frontline but I’m not too far behind it, in the background as a support to money advisers with advanced casework, in the development of protocols, negotiating with creditors, providing the MABS helpline, its casework systems, education supports, learning and development, social policy and communications and so on.
I was there at the beginning; I was there during the middle, and the end? Well we’ll all have to see. We are making a lot of progress, especially over the last 3 years, I hope, but I can’t be sure, that we are now at the beginning of the end. I sincerely hope we are.
Based on 10 years of working on personal debt and nothing else, I suppose it might be OK to share some remarks today about what I’ve learnt.
I had to think about accepting the invitation from Muiris, because there is a lot of emotion tied up in the work, which is hard to hide when you speak. There is a risk, that when you talk with empathy about over-indebted borrowers that you will be seen, by some, as a ‘bleeding heart’, a soft touch, a bit naïve, or downright gullible. In my experience, it’s possible to take an entirely rational approach to casework, to do the sums and follow the money advice process objectively and systematically, and to also be affected and moved by what you see. Personally, I see that as strength of a profession and not a weakness.
The points I make today are, more or less, the same ones I’ve been making in dealing with banks and financial institutions and other creditors and stakeholders over the last 10 years.
Relationships matter. Trust matters.
The first point I’d like to make is about perspective. Over the last decade, just about everyone in MABS has spoken to a caller or a client who has expressed some form of suicidal thought or concern. I can’t give numbers but I do believe that lives have been lost where concern about debt was a major contributing factor.
Against this backdrop, and fully realising the severe consequences that households unable to pay their debts often face, our priority in MABS is always the mental and physical well-being of our clients. First and foremost.
Reflections – a trickle that became a flood
In preparing for today, I looked back at what I was doing 10 years ago. I remember going to a training event shortly after I joined MABS in early 2008. In retrospect, perhaps there were signs.
We were in a now long-gone venue off O’Connell Street. It was a cold and wet day and the roof was leaking. Paul Joyce of FLAC was providing training about problems with sub-prime mortgages, and at the tea break, in politely welcoming me to MABS, advisers were saying ‘yes’, there was a problem with sub-prime, but there might be bigger problems coming.
Shortly afterwards, roughly March 2008, an email from one of our Dublin offices called out for help from other offices. There had been a constant stream of clients coming through the doors over the past four months with utility bills and threatened disconnections. At first, she said, she thought it was ‘seasonal’ but now, she wrote, ‘there is no end in sight’.
Waiting lists for appointments started to build, we had more mortgaged clients, more facing utility disconnections, problems with personal loans, credit union debts, HP, credit cards, private and local authority rent arrears, catalogues, medical bills, court-fines.
While we had a growth in the number of mortgaged clients, there was a bit of a lag before mortgage arrears really became a core component of MABS casework. In our experience borrowers prioritise their mortgage and so it was the ‘other debts’ that became problematic first.
Perhaps hoping that their financial difficulties would be short-lived, many tried other strategies to protect the family home first, including debt consolidation, use of credit cards, other borrowings and using redundancy payments. Early on, Mortgage Interest Supplement (MIS) was a vital support for those who were eligible. So it was really from 2010 on, when we felt the mortgage problem most acutely. Self-employed people seemed to experience difficulties first, because if they weren’t getting paid, they themselves couldn’t pay their debts and they had little by way of State supports to fall back-on.
We weren’t meeting strategic defaulters; we were meeting people who were doing their best to meet their commitments but sinking faster into problem debt. Our research shows that many felt personal responsibility; some felt they had been poorly advised, (particularly by brokers), and others felt that they were not adequately educated about the risks they faced when they took out their loans. Some were stuck with very high sub-prime interest rates.
Some wanted to get out early. The house was no longer a home, it was a ‘millstone’, but there was no way of getting rid of residual debt after a voluntary sale or surrender. Also, in the early years, if you surrendered the property you could have been deemed to have made yourself ‘voluntarily homeless’ and face difficulties in accessing social housing. Early on, a lot of people delayed taking decisive action perhaps because they believed that new regimes for personal insolvency and debt resolution were forthcoming, as proposed in the Law Reform Commission’s report on Personal Debt Management and Debt Enforcement (2010) and included in the Programme for Government of the Fine Gael/Labour coalition (2011).
I know the term ‘irrational exuberance’ has been used to explain our boom and bust, but looking back at our cases, I would say there was an equal measure of ‘rational pessimism’. Amongst our clients there have been many who felt that if didn’t purchase a home they risked being priced out of the market for good.
When I reflect some 10 years on, that leaking roof in the room of O’Connell Street had been the portent for what would soon become a flood.
I met Muiris in the summer on the ‘apologies research’ and I left the interview feeling unsettled. ‘Was there abuse? Were there victims? Who could determine that? Would an apology help? If apologies are going to be given – who should or could give them?’
Whatever of the evidence we may see in casework, in Ireland, we see no evidence to date of success in making a defence based on a civil wrong of reckless lending. Where would you locate accountability? Because the Irish Credit Bureau was not fully comprehensive, lenders may have only had a partial insight into the extent to which borrowers were over-extended. Brokers seem to have been instrumental in the ‘credit bonanza’. Additionally, the sub-primes, (GE Money, NUA, Stepstone, Start Mortgages, Springboard) stopped lending, and their loan books have been sold or are ‘under management’ by credit servicing firms. Anglo and Irish Nationwide were liquidated; BoSI, Danske and Rabo have all exited the Irish market and currently the non-performing loans of several of the main banks are in the process of being sold.
Thinking more about the subject matter of Muiris’s research ‘Apologies’, and in no way meaning to denigrate the importance of this research, which I believe is both necessary and important. I am minded of my 5-year-old daughter’s response to her brother after a particularly brutal row. ‘Sorry is just a word Ely; it doesn’t actually make anything better’.
Making things better
Making things better, or at least more manageable, is the role MABS has played over the last 10 years. Inevitably MABS staff acts as ‘lightning rods’ for emotions that need an outlet and that process is ongoing. My office door opens onto the MABS Helpline and when the loan sales to funds happened during the summer, I could hear our advisers dealing with calls from borrowers both distressed and angry about what was happening. Over and again, I could hear advisers say ‘I understand that you are angry, I understand that you are upset’, and sometimes, too ‘I’m sorry that you feel like that’.
Often when people talk about MABS, they will talk about the kindness of staff and their ethic of care which is very good to hear, but sometimes that focus can detract from the other strengths of the service provided, the professionalism, the structured approach and a certain doggedness about the value and integrity of process, and of ensuring that we advocate strongly for borrowers whose legitimate rights as consumers may have suffered through their engagement with financial services providers and others.
We, in MABS, tend to be pedantic about such things as reviewing original contracts and related documentation, using regulatory Codes as an integral part of casework and exhausting relevant appeals mechanisms.
We try to use plain language in our own documents and in our interactions with clients. We won’t over-promise or say that we will deliver a particular outcome in a particular case, we set out pros and cons of various options very clearly and we aim to empower our clients both to take control of their decision-making and their case. The goal, whatever the outcome, is to try and build financial self-reliance and re-build capability. It’s not just the debts that wear people down, it’s the feeling that there are constant ‘micro-aggressions’ or ‘micro-transgressions’ within the process of getting an agreement that can build to a point where they just give-up.
In short, we will never intentionally replicate any of the weaknesses we have perceived in the wider financial services sector. Our clients often have not been served well in their consumption of financial products. In this sense then, MABS plays a role in a restorative process between borrowers and banks and other creditors. We aim to show clients that while they have responsibilities in respect to their borrowings, they also have important rights that must be upheld by their financial services providers. .
What I am more aware of though, since that discussion with Muiris, is the vital role that MABS has in brokering between borrowers and financial institutions.
‘Credit crunch’ – tracing back to the Latin origins of the words, literally means ‘broken trust’. I think Simon had a September 2007 article, about the ‘run’ on Northern Rock that makes the same link; ‘credo’ – ‘I believe’…’I trust’. Credit, like trust, is, in my view, a kind of essential social lubricant that reduces friction and lets us get things done. Too little of either credit or trust gives us friction and ultimately stagnation, too much …well, we have seen what happens when we are too trusting.
In MABS we have always played the role of ‘honest broker’. We are in the middle between borrowers and banks; rebuilding trust and thus reducing friction when relationships have broken down.
I don’t like the term strategic default. It implies a deliberate and meditated gaming of the system that I just don’t see. There is some research (Connor and Flavin 2015 and O’Malley 2018) and lots of speculation about the extent of strategic default in the Irish mortgage arrears crisis. Some researchers have noted that it is difficult to quantify strategic default using large data sets. It is claimed that, ‘strategic defaulters… disguise themselves as people who cannot afford to pay’.
We in MABS, have the benefit of having the relevant information, we can see the loss of income on payslips, or social welfare statements and the consequent impact on a household’s budget and its expenditure on bank statements. What we don’t often see in MABS (and, if you think about it, why would we?), are people who can afford to pay their debts but won’t. On the contrary, we see people who wish to pay but too often just can’t.
Dealing with one thing at a time – ‘non-engagement’
Another phenomenon observed in the Irish mortgage arrears crisis is that of ‘non-engagement’. I believe, (and our own limited research carried out in 2011 and 2013, backs this up), that there is an important causal link between mental illness, depression, relationship and family breakdown and chronic physical illness in the persistency of our personal debt problems.
All those issues can lead to, or arise from, a loss of income, but can also serve as a block to addressing an arrears difficulty. In my experience most people have only enough personal resilience to deal with one life-changing event at a time and sometimes are just not able to engage with their debts while dealing with another personal crisis. I’ve seen cases where one borrower has hidden the arrears from a partner because they were too afraid of the hurt or harm it could cause to a loved-one already coping with a recent cancer diagnosis or severe post-natal depression.
I’ve also heard of cases where borrowers were poorly advised and where respected third-parties said ‘don’t pay’ either because blanket debt forgiveness was on its way, or because the loss of the home was inevitable, and the borrower would be better-off paying nothing in preparation for the day they’d lose it.
While we hear a lot about both the strategic defaulters and the non-engagers there’s much less said about the people who are engaging to repay their debts.
Living with problem debt
So I’d like to take the opportunity to say something about our experiences of borrowers who are working to resolve their arrears and why we in MABS are there to support them.
Many of our clients are hoping that things will improve and are actively working to make that happen and for some, thankfully, it is happening.
Getting payments back to a level where the bank/loan owner will put in place an arrangement can involve many sacrifices. It can involve putting your life on hold, not thinking about, or being able to plan for old age, it might involve taking in lodgers in your older years, cutting out holidays and a social life. It involves applying for any available State supports to increase income. Many are double-jobbing and juggling shift patterns or relying on grandparents to avoid paying for child-care. For most, it involves a regime of watching every last cent that comes in and goes out. It involves, making a budget, cutting it, and cutting it again.
For those in late-stage mortgage arrears, it may involve having to go to Court, and having neighbours, friends, family and colleagues know that your home is at risk of repossession. Being over-indebted can limit access to credit and may mean that when something goes wrong you won’t have cash to see it right.
Before coming to us, some of our clients may have put off seeing the doctor or the dentist and are just living through the pain. Others may have forgone educational opportunities, sold a car or other small items of value; a laptop, a bike, a ring. Some might decide not to have another child or perhaps not have children at all.
In order to come to an alternative repayment arrangement (ARA), you have to write down what you earn and what you spend and provide back-up documentation to support it and give that to your creditors.
You must tell the story of ‘how you got here’ to strangers; sometimes over and again. That ‘story’ often involves losing a job, having a serious illness, a relationship breakdown, bereavement, a failed business. It will nearly always involve some ongoing vulnerability in relation to certain basic expectations (a job, a family, and a home) as well as an ongoing anxiety about the overall direction of your life.
Depending on the lender/loan owner and their ‘suite of options’, a temporary restructuring arrangement is a possibility and, in the case of mortgage debt, if you can stick with it for 12 months you will likely get a long-term arrangement but, it will be reviewed periodically and, things can change.
Most borrowers have to wait patiently for their lender’s internal wheels to turn before they get an arrangement. Borrowers can and should, explore other options such as insolvency or Mortgage to Rent (but both timing and decision–making by banks have a bearing on this). Sometimes our clients won’t get an arrangement and they won’t necessarily ever get to know why. Other than that they have been deemed ‘unsustainable’. Those with strength, stamina and support can appeal their lender’s decision and keep going.
But be in no doubt, if you have problem debt and in particular, mortgage arrears, your lender is in your life.
Roughly this time 10 years ago we began working on an Operational Protocol with the Irish Banking Federation (now BPFI). I remember early meetings where a number of the member institutions seemed reluctant to fully engage. There was a lot of talk about ‘delinquent borrowers’ but as the months went by, attitudes changed and it became obvious that both we in MABS and the participating banks needed a standard process for joint engagement with borrowers in arrears.
As we progressed into 2009, there was no more talk of ‘delinquent borrowers’ and everyone realised that problem over-indebtedness was a mainstream issue. It could happen to you, or me, our parents, our siblings, our friends.
The aim in working with banks at that time was to put in place, ‘mutually acceptable, realistic, affordable and sustainable’ solutions for over-indebted borrowers. We agreed to work within defined timeframes, to use a Standard Financial Statement (SFS) and participating institutions agreed to halt legal action for the period during which MABS and borrowers were working to put in place an arrangement. If I look back, that first protocol between MABS and BPFI members was absolutely critical to our work over those very difficult early years of recession.
Remember; this came before the Code of Conduct on Mortgage Arrears, before the emergence in the Irish market of commercial debt management services and before we had a regime for personal insolvency. In MABS we went on to successfully apply those principles in our dealings with all creditors.
I can honestly say the work we did with banks and major utilities on that first protocol, both at one-to-one level, and through various representative fora, was amongst the most effective parts of the work we have done in the past 10 years. In 2015, we developed a further protocol providing defined timelines for write-down or write-off of unsecured debts for eligible borrowers. The approach was not one of parallel governance; there is a welcome acceptance now within key processes such as the Mortgage Arrears Resolution Process (MARP), that repayment plans must be sustainable. That borrowers need to be able to pay for more than just the essentials of light, heat, food, for themselves and their children and so on, but also to have some money for ‘social inclusion’ in order to sustain an alternative repayment arrangement.
It really helps that MABS is named in relevant Codes such as the Code of Conduct on Mortgage Arrears and the Consumer Protection Code and in the CER’s Utilities Suppliers’ handbook.
It helped that we knew that the most senior executives in (at least some of) the main credit institutions were aware of MABS and supportive of what we were doing with, and for, their customers.
It helped when some of the institutions asked us to train their front-line staff. It helped when we sat around the table together to discuss cases and it helped that we had escalation contacts to call on in the most intractable cases. All of this work was about building and re-building trust between ourselves and creditors and between our clients and their creditors. It would be wrong to give the impression though, that creditors work with MABS as some benign expression of their corporate social responsibility. They do it, because (to use a now almost iconic banking term) they have ‘skin in the game’.
Continued role for MABS
Ten years on, we’ve begun to talk to creditors, via the BPFI, about reviewing and renewing our 2015 protocol. The objective would be to enable more borrowers to achieve a lasting resolution to their debts within a defined period. My primary current concern however, is that the landscape in which MABS operates is fragmenting (I’ve already referred to all those who have exited the market) and that the essential role we play in brokering between borrowers and banks and other creditors could be lost. The greatest manifestation of this is the sale of non-performing loans (NPL’s) to funds managed by credit servicing firms. I have read the ECB guidelines on NPL’s and I understand what is happening from the regulatory and banking points of view, but I need to see a constructive operational role for MABS within this changed landscape.
A 2011 report by the ESRI on Financial Exclusion and Over-indebtedness in Irish Households notes that at that time, ‘The principle policy initiative on over-indebtedness was the setting up of the Money Advice and Budgeting Service (MABS) in 1992. In MABS almost from the outset, we knew that what we did was not enough. We knew that debt forgiveness is essential – people need to move on. We have so much more than we had this time 10 years ago. We have the Code of Conduct on Mortgage Arrears, we have the personal insolvency regime, we have Dedicated Mortgage Arrears Advisers in MABS, and we have the Abhaile Programme. We have a new Credit Register.
When I look at MABS national statistics and talk to advisers about their casework, I know much more remains to be done. Our target group has aged. 10 years ago, the majority (52%) were aged 26 to 40; now the majority of new clients (58%) is aged 40 to 65, and the number aged 65 and over, while remaining a small percentage, is growing.
Ten years ago, we were working with a client group that was primarily reliant on social welfare, with just over a third waged or self-employed. Now, almost half of our clients are waged or self-employed. This changing demographic is proof of our efforts, especially in recent years, to reach-out to more borrowers in late stage mortgage arrears, but it also shows that there is much remaining to be done and time is very much of the essence. Lasting resolutions are needed.
A ten year anniversary is of course a time for reflection but I’m also thinking about the future.
I’ll leave you with a few thoughts:
I see our role as ‘honest broker’ as having become more difficult and also more necessary as the years have passed. There was the banking collapse, the ‘tracker review’; last week an issue with the calculation of interest rates on top-up loans, this week an issue with the calculation of arrears by some loan owners. The sale of loan books to entities we know too little about is ongoing. It’s harder to build trust against this back-drop and consequently, what economists would call ‘transaction costs,’ are rising.
Even though we are still dealing with the over-hang of legacy debt, the wider world has moved on; relationships between financial institutions and their customers have changed. Tech giants have moved into payments and behemoth challengers like Tencent and Square are emerging. These developments are not without huge risks but they will democratise financial services and give us all more choices. Whether banks as we know them survive is really about how they treat their customers.
In my role I’ve become watchful for ‘canaries’…
My 11 year old firmly refuses to put his small savings into any bank or financial institution. Like many, his age, he grew up in the shadow of the banking collapse and, even if he wasn’t fully listening, the kitchen and car radios, had predominantly bad news about both banks and borrowers. Instead he buys ‘v-bucks’ and saves them for ‘new skins’ and ‘battle passes’. For the moment, like millions of children like him, he puts both his trust and his money into ‘EPIC’ games.
The world moves on.
I will leave it to Muiris and his colleagues to examine further whether apologies are needed, who should give them or whether, at this point in time, they would have any real value either for borrowers or for banks.
Views expressed in this speech are those of the author alone and do not represent the official views of ‘MABS’.
Blog: Public Apologies and the Banking Crisis in Ireland – Summary Results of a Public Opinion Survey
Project team member Prof Shadd Maruna has authored this blog to accompany the release of the research report of the same name, which can be accessed here.
With the launch of this report, we are thrilled to finally start to release some of the very preliminary and descriptive results from our 2017 survey of the general public across the island of Ireland, north and south, as part of this ESRC project on public apologies. The survey, carried out by Perceptive Insight, involved over 1000 face-to-face interviews with a stratified random sample of adults across every county in Ireland regarding what they think about the role of public apologies across a range of sensitive and controversial subjects.
Overall, we were surprised by how well respondents engaged with this topic and the level of support for (even demand for) further apologies across a range of issues clearly shines through in these results.
This first report focuses primarily on the responses regarding the banking scandals that shook Ireland in the past decade. Over three-quarters of respondents either agreed or strongly agreed that public apologies by the banks or the State were an important part of moving on from the scandal. Yet, hardly any respondents can recall hearing a single apology from these groups, with only 6% remembering an apology from individual bankers and 12% remembering an apology from the Irish state. It is little wonder, then, that fewer than 5% of respondents felt that any of the responsible parties had adequately apologised for their role in the banking crisis to date.
One of the benefits of our survey is that it allows us to compare these responses across a variety of other social issues, including the institutional abuse crisis in the Catholic Church in Ireland and the conflict in and about Northern Ireland. Without drawing any false equivalencies between these very different aspects of Ireland’s recent history, it is interesting to note, for example that a larger percentage of survey respondents felt that the Church or the British State, for example, had adequately apologised for their roles in these other crises than the banks had for their role in the economic crash. The overall finding, however, is that the public overwhelmingly feels that we are owed more and better apologies across all of these different domains.
Co-investigator Dr Muiris MacCarthaigh has written this blog to accompany the project’s research report on ‘Apologies, Abuses and the Past: The Irish Banking Crisis.’ The full report can be accessed here.
Saturday 29th September marks the 10-year anniversary of one of the most controversial decisions in the history of the Irish state – the government’s late-night guarantee of all liabilities within domestic Irish banks. A fortnight before, totemic US bank Lehman Brothers went bankrupt due to its huge exposure to the American property market. This caused a freeze on inter-bank borrowing markets, and resulted in a global funding crisis to which Irish banks were badly exposed.
Citing fear of a run on bank deposits by customers, such as that which had occurred in Britain earlier in 2008 with Northern Rock, the then Fianna Fáil‐Green Party coalition government decided to provide a guarantee not only to ordinary depositors but, controversially, to all bond‐holders of the six main domestic financial institutions. The Oireachtas Banking Inquiry which took evidence through 2015 heard differing accounts of the decisions that led to the guarantee. This was made more difficult by the fact that no minutes of the meeting or drafts of the wording for the guarantee are to be found.
As the scale of the losses materialized in the guarantee’s aftermath, the Irish government pumped huge sums of money – much of it borrowed on international bond markets – into the banks. At one stage, then Minister for Finance Brian Lenihan claimed the bailout would constitute the ‘cheapest bailout in the world so far’. In fact the cost to the taxpayers of bank recapitalization quickly escalated to over €55bn.
The banking crisis and subsequent government guarantee have had enormous consequences for Irish politics, economy and society. It resulted in the ‘earthquake’ election of 2011 and the election that nobody won in 2016 which fragmented the Irish party system. It gave way to years of budgetary cutbacks and underinvestment in critical areas such as housing. And although Irish economic growth has recently recovered to outperform its EU peers, the legacy of national debt from the ‘lost decade’ remains high. The effects of the crisis have also been felt north of the border where sales of distressed property loans have courted controversy.
So what are the views of the victims of the Irish banking crisis? Technically, all taxpayers in the Republic of Ireland could be considered to be victims as a proportion of their annual tax continues to repay the cost of the bank bailouts. But there are many who have been more directly and severely affected by the crisis – the hidden stories of the crisis.
As part of an Economic and Social Research Council (ESRC) project titled ‘Apologies, Abuses and Dealing with the Past: A Socio-legal Analysis’, researchers from QUB have been speaking to those who have been asked to apologise for harms associated with the banking crisis, those who were directly affected by those harms and members of the general public across the island. In addition to conducting interviews and focus groups with bankers, victims and other stakeholders, the team conducted a nation-wide population survey during June and July 2017 with a stratified sample of more than 1000 individuals in 100 locations across all 32 counties.
The results identify that survey respondents strongly believe that:
* Public apologies are a necessary part of moving on from the banking crisis
* The parties responsible for the crisis have either not apologised at all or else have not adequately apologised
* Further apologies are needed
While apologies and statements of regret have in fact been made by some banks, 89% of the Irish public are unaware of them and 94% are not aware of any apologies by individual bankers. Only 4% believe that the Irish state has apologised adequately for its role in the banking crisis.
Interestingly, there are mixed views as to how personally helpful people believe direct apologies by banks to victims of the economic crisis might be, with only 41% of those surveyed believing them to be so. However 73% of respondents agreed that further apologies by those responsible for the banking crisis would be helpful to society as a whole. Only 4% agreed with the idea that “people should just move on”, with youngest respondents (between 18 and 24) the most likely to agree with this statement (with 10% agreeing to this). These views are also reflected in focus groups and interviews with victims of the banking crisis. As one interviewee said:
The fact that [the banks] let a property bubble come up and the economy crashed and everything else, [but] you are at fault if you don’t make your full repayments. So, they are pushing the guilt on you and that is what is affecting you for ten years, trying to pay this mortgage that you can’t afford. It’s that you are in the wrong if you are not paying it. So, for the banks to suddenly flip that and apologise and say, well those ten years actually where we were squeezing the life out of you, you weren’t in the wrong, we were. That would be too big a gap for them because: where is my money? Why were you squeezing three-quarters of my wages for the last few years, where do I get that back?
One of the most striking issues that has come to light through these interviews and focus groups is the extent of hidden or unseen suffering. Those who have lost homes, experienced family break-ups and lost loved ones to suicide are real victims of the consequences of the banking crisis. Although a decade has passed, the legacy of that crisis remains keenly felt across Ireland.
Co-investigator Prof Anne-Marie McAlinden has authored this blog to accompany the release of the research report: Apologies and Institutional Child Abuse. You can access the full report here.
From at least the 1990s, the issue of institutional child abuse has emerged as a major societal issue which has resonated internationally. High profile cases of historical institutional child abuse have arisen in the United States, Australia, Canada and across Europe. A range of official responses have been deployed including public inquiries or truth commissions, criminal prosecutions, monetary redress schemes as well as public apologies by church and state.
In the Republic of Ireland, the then Taoiseach, Bertie Ahern, issued the first state apology to victims of institutional child abuse in May 1999. Beginning with the Ryan Report (2009), a series of Commission reports highlighted the systemic nature of abuse – physical, sexual, emotional abuse and neglect – within institutions run by the Catholic Church on behalf of the Irish State and the failure of the authorities to intervene.
In the wake of the publication of the McAleese Report into state involvement in the Magdalene Laundry regimes in February 2013, the then Taoiseach Enda Kenny issued a second fulsome apology to survivors, which was widely praised as a defining moment in his premiership.
In Northern Ireland, the report of the Historical Institutional Abuse Inquiry was published in January 2017. To date, following the collapse of the Northern Ireland Executive, its key recommendations with respect to public apology, memorialisation, and compensation for victims have not been realised.
At this timely juncture, this report examines the role of public apologies as response by state governments, religious orders and individual members of the clergy in the aftermath of institutional child abuse. As public expressions of acknowledgement, responsibility and regret for past harms, meaningful apologies can vindicate the experiences and suffering of survivors and contribute to their personal healing.
In addition to the restorative benefits for victims, at a broader collective level, apologies can also help society to come to terms with the past as symbolic acknowledgement of harm and visible sign of a break with the past, as well as a tangible reminder that such harms should not be allowed to recur in the future.
While there has been a plethora of public apologies to victims/survivors of institutional child abuse in the Republic of Ireland and Northern Ireland by governments, civil authorities, as well as religious orders and individual clergy – often following public revelations of abuse or accompanying the announcement or conclusion of public inquiry proceedings – the sincerity and legitimacy of apologies in the context of such serious wrongdoing has often been questioned.
Indeed, as this report also highlights, there are many examples of ‘non-apologies’, or ‘apologising without apologising’, where the apology has fallen short in terms of its form, function and effect. These apologies have been judged as insincere, as they are viewed as an effort to placate the public or silence victims, rather than as a legitimate attempt to openly and explicitly redress wrongdoing.
One of the core tasks of this report is to examine the key elements of a meaningful apology for victims and survivors of institutional child abuse. While the academic literature varies in terms of precisely how these various elements are conceptualised, a sincere and legitimate apology would include the following: an explicit acknowledgement of wrongdoing; an acceptance of responsibility; an expression of remorse or regret; a promise of non-repetition; and an offer of reparation or corrective action.
Moreover, it is not only the content or language of an apology which may help determine its effectiveness or contribute to its perceived sincerity in the eyes of victims and the wider public. The context, performance and choreography of the apology – where it is delivered, when, how and by whom – also emerge as pivotal factors. Crucially, apologies are likely to be perceived as meaningful when they are delivered in a broader context and setting which demonstrate solemnity and significance as well as appropriate follow through – such as the setting out of clear mechanisms for truth, accountability, reform and redress.
However, there are a range of obstacles which may impede a meaningful apology which the report also highlights. These include the fear of legal or financial liability or reputational damage which can prevent offenders from accepting full responsibility for wrongdoing. For collective apologies, made on behalf of a whole organisation such as the Catholic Church or the state, lack of consensus among the leadership in terms of the precise language, form and performance of the apology can also thwart the construction and delivery of a legitimate and sincere apology.
Although meaningful apologies are not easy to deliver, they have been repeatedly cited as one of the highest priorities by survivors of historical institutional child abuse. The report highlights the competing tensions surrounding the construction and delivery of a legitimate apology which seeks to balance the often differing priorities of apologisers and victims/survivors. While words alone, without more tangible responses, are likely to be insufficient for victims, an apology often represents a first and necessary step to coming to terms with the past.