The Standards of Lending Practice for personal customers review

The Lending Standards Board (LSB) works to the remit of promoting fair lending; ensuring that all personal and small business customers receive a fair deal from their lender. The LSB provides independent oversight of registered firms’ adherence to the Standards of Lending Practice (the Standards).

The Standards for personal customers were launched in July 2016 and comprise six main areas:

  • Financial promotions and communications
  • Product sale
  • Account maintenance and servicing
  • Money management
  • Financial difficulty
  • Consumer vulnerability

The Standards moved away from the prescriptive nature of its predecessor, the Lending Code, recognising that there may be more than one way to achieve the right outcome for the customer, allowing firms to take into account the individual customer’s situation. The Information for Practitioners sits alongside the Standards, setting out good practice and providing firms with examples of ways in which they meet the requirements of the Standards, acknowledging that there may be more than one way to do this.

Our approach

The move away from prescriptive rules has created a forward-looking set of standards which can continually evolve, to ensure they remain relevant and for developments within the industry to be incorporated. We are seeking input from registered firms, industry bodies, consumer and debt bodies, and other relevant parties whose work may interact with our own to help us consider whether further updates to the Standards are required.

This process is not intended to be a wholesale review as would have been undertaken in the past under the Lending Code, instead, it is intended to be an opportunity to take a fresh look at the Standards now that they have had a chance to embed.

We are conscious of the need to ensure that the Standards remain current while balancing this against the variety of work which is being undertaken within the personal lending space. The industry is continuing to evolve its approach to key areas such as vulnerability and financial inclusion, while fintechs are continuing to challenge thinking around the way in which firms engage with their customers.

We would welcome views on the following areas:

  • how the Standards can further encompass the digital journey;
  • how we could seek to capture good practice in relation to financial inclusion;
  • whether there are any wider industry themes which could be explored further within the Standards;
  • any other feedback you may wish to provide.

How to respond

Please email responses to Laura Mahoney: by 30 March 2018.

Next steps

We will consider the feedback received with a view to discussing any key outputs in conjunction with the working group which helped us to develop the Standards of Lending Practice. We will provide further updates on the progress of this work in due course.

This review is now closed.


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