The Lending Standards Board (LSB) has published a new Standards of Lending Practice(Standards).
The Standards are voluntary and set the benchmark for good lending practice in the UK. The Standards apply to personal customers and cover six main areas:
- Financial promotions and communications.
- Product sale.
- Account maintenance and servicing.
- Money management.
- Financial difficulty.
- Consumer vulnerability.
A separate section covers governance and oversight, setting out the framework firms should have in place to ensure that the Standards are implemented and operate effectively.
The Standards cover loans, credit cards and current account overdrafts. Although the LSB has confirmed that a wider range of consumer lending products is currently under consideration.
The Standards will come into effect on the 1 October 2016 and will replace the LSB’s Lending Code.