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Commercial Credit News
|New lending standards published|
|Thursday, 21 July 2016|
Changes to the voluntary code of practice followed by the main providers of overdrafts, credit cards and personal loans are being published today [20 July 2016] following an independent review of the Lending Code.
The new Standards of Lending Practice will build on the current Code and will bring enhanced protections for vulnerable customers and those who may be at risk of financial difficulties.
Under the new Standards, firms will have to focus on achieving good outcomes for their customers at every stage of the process, from advertising products and customer applications through to the closure of an account.
Central to the new Standards are seven core principles [detailed in the notes below] which set out what all customers can expect from lenders. These include commitments to provide clear information and documentation, the responsible promotion of products and support for those experiencing financial difficulty.
The changes follow an independent review of the Lending Code by Professor Russel Griggs OBE, commissioned by the Lending Standards Board that oversees adherence to the Code. The new Standards of Lending Practice will become effective on 1 October, with the existing Lending Code remaining in force until then.
Lord Hunt of Wirral, Chair of the Lending Standards Board, said: “Making sure customers get the best possible outcomes when they borrow money is right at the centre of what lenders must do, and these new Standards will help them achieve this.
“The Lending Code has evolved over the seven years since it was first introduced and we are determined this process continues to respond to changes in the marketplace and the regulatory environment. While giving firms the flexibility to provide innovative new services for their customers, we are also enhancing the protections for vulnerable customers and those who might be at risk of falling into financial difficulty.
“The Lending Standards Board will continue to provide independent oversight of adherence to the Standards and the LSB will continue to challenge the industry to improve”.
The new Standards, as with the Lending Code, will be overseen by the independent Lending Standards Board, and are sponsored by two industry trade bodies, The UK Cards Association and the BBA.
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