Originally published on 25th November 2009.
On 30 October 2009, the British Bankers' Association (BBA)
published a press release relating to the new Lending Code which
came into force on 1 November 2009, the date on which the FSA
assumed responsibility for regulating retail banking conduct of
business.
The FSA is taking over from the Banking Code Standards Board
(BCSB), which is relaunching as the Lending Standards Board (LSB).
The LSB's website went live on 2 November 2009, and the
BCSB's website has been closed.
In the past, the FSA has not made comprehensive rules governing
the conduct of retail deposit taking business and has instead
relied on the regime of voluntary self regulation operating under
the Banking Code and the Business Banking Code (the Banking Codes),
which the BCSB has been responsible for monitoring and
enforcing.
The LSB will oversee the operation of a new Lending Code, which
will set out the relationship between lenders and borrowers. In
broad terms, the Lending Code replaces those elements of the
Banking Code and Business Banking Code (Banking Codes) which relate
to lending (that is, their credit and debit elements). It will
cover good practice in relation to:
- unsecured loans;
- credit card lending; and
- current account overdrafts.
The other elements of the Banking Codes will be covered by the
FSA's new regulatory regime.
Commenting on the Lending Code and the LSB, Robert Skinner, LSB
Chief Executive, said: "The [LSB] will ensure that the new
Lending Code strengthens the protection customers will have when
borrowing. It will independently monitor and enforce the Code and
take action where lenders fall short of the Code's
standards."
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