New Lending Code ‘will help consumers’

Those looking to take out a loan or credit card will be protected by a new code that members of the British Bankers’ Association will adhere to, the organisation has announced.

The new Lending Code will operate form this month and will stipulate how lenders should act in respect of various issues concerning consumers and credit.

Among these are how credit is assessed, the application of risk-based pricing, ways of dealing with those in financial strife and how to proceed when a borrower has a mental health issue.

Chief executive of the lending Standards Board Robert Skinner commented: “The Lending Code sets out what it means to be a responsible lender covering both credit assessment and the support that will be available if things go wrong.”

The Treasury Select Committee is also looking into the credit system, with an inquiry into the impact on consumers’ credit ratings of having multiple searches.

Nationwide Building Society has welcomed the study, arguing that a “soft quote” system should always be used to give customers information about what price they may be charged for credit before they proceed with an application.

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