I want my floor

I’m making this up but it’s not hard to imagine: a pleasant meal with the extended family (in other words, the in-laws) on a warm Sunday in spring. The subject of mortgage floor clauses comes up and one sister-in-law announces her success against her bank; they are going to pay her back the huge sum that they had charged her illegally by applying a minimum exchange rate to her mortgage. She’s entitled to so much, says the triumphant economist, that she won’t have to take out a loan for her daughter’s First Communion, when it goes without saying that they’re all going to Disneyland Paris.

Anyway, the sister-in-law, green with envy, does her own mental calculations: if they’re paying so much back to her then I’m entitled to the same, or even more, she announced proudly to her brother’s wife. She calls one of those lawyers who are advertising all over the place that they will take care of the negotiations or lawsuit, if necessary, in exchange for a modest commission when they win.

As I said, this is an imaginary scenario, but the next part is funny and - I promise I haven’t made this bit up - a reflection of the situation in some of our local bank branches. The woman, on the advice of her lawyer, turns up at the bank and demands that they pay back what they have been charging her illegally for her mortgage floor clause. First of all she speaks to the clerk. He puts her details in the computer and turns back to her with relief. “You’ve never had a floor rate clause, and so you can’t claim for something that hasn’t been taken from you.”

The woman, by this time irate, demands to speak to the manager who explains, point by point, the same thing, and shows her the mortgage conditions that she signed. Not content with that response she gets her lawyer on the phone, insisting that she should claim her nonexistent clause.

The farce had three acts, as many as the woman’s visits to the bank. Eventually defeated, but with a show of financial knowledge, she ended up criticising the bank for not putting the clause in her mortgage.

Whatever the case, the point is that things are always the bank’s fault. It’s true that they haven’t always done everything right, but neither are they responsible for all the troubles in the world.