The Lending Code is ‘sponsored’ by the three main industry trade associations: the British Bankers’

Association (BBA), The Building Societies Association (BSA) and The UK Cards Association. The Code sets standards of best practice in dealing with personal and micro-enterprise customers. It does not cover the commercial pricing of products and services.
This paper is the formal response of the Code sponsors to the independent review of the Lending Code carried out between June 2010 and November 2010.

The review was carried out by Professor Lorne D Crerar, an independent consultant, on behalf of the Lending Standards Board. A three month formal consultation period invited views from all stakeholders and interested parties. The independent reviewer received 33 submissions and held a series of bilateral and roundtable meetings to explore stakeholders’ views in more detail.

The independent reviewer’s report was presented to the Code sponsors in November 2010 and is publicly available on the Lending Standards Board and Code sponsors’ websites.
This paper outlines the changes that will be made to the Lending Code as a result of the
independent review, to further improve the services that customers receive from Code subscribers.

Executive Summary We will make more than 30 new additions to the Lending Code in response to the independent review. The key changes focus on two key areas of lending – the credit assessment process and the sympathetic and positive treatment of customers in, or at risk of, financial difficulty – but new provisions also extend to each section of the Code and to the way in which we will promote the Code’s protections to customers.
In response to requests from the majority of respondents to the review we are introducing two customer-facing Lending Code documents, one each for personal customers and micro-enterprise customers. These documents will provide an introduction, in plain language, to the Code’s key commitments and from April 1st will be available online and in branch. Additionally, from July 1st onwards all subscribers to the Code will provide these documents to their new lending customers.

The 2011 Lending Code will include stronger credit assessment requirements to ensure that
subscribers continue to lend in a responsible manner. It will also include a number of new provisions relating to the development of current accounts that give customers the opportunity to opt-out of entering an unarranged overdraft. For credit cards, the new Code will include the industry’s agreed commitments to give customers greater control over their cards. This includes paying off the most expensive debt on the card first; ensuring that interest rate changes are clearly communicated and that customers receive
2 appropriate information about the potential consequences of continuing to make only minimum repayments to their balance.

We are making the largest number of additions to the Lending Code to deal with appropriate
treatment of customers in, or at risk of financial difficulty. This includes the extension of availability of the breathing space provision to customers using self-help or fee-based debt management tools;

new Code provisions on appropriate use of Set Off and when consideration should be given to
interest and charges concessions; extension of the Code’s remit to include the CFS best practice creditor checklist and more comprehensive provisions on helping customers with a mental health condition to deal with their debts.....Read more HERE PDF