The Lending Code

The Lending Standards Board (LSB) was set up in November 2009 with responsibility for the conduct of business regulation for deposit and payment products.

This was previously the responsibility of the Banking Code Standards Board with the same responsibility to protect:

  • consumers
  • micro-enterprises that have fewer than 10 employees and do not have a turnover or balance sheet exceeding €2m
  • charities with annual income less than £1m.

The key objectives of the LSB are to:

  • assist firms to interpret and meet the requirements of the Lending Code
  • monitor and enforce compliance with the code and take enforcement action for material breaches
  • identify any gaps and deficiencies in the code that could lead to consumer detriment and to advocate change.

The code sets standards of good lending practice in relation to loans, credit cards and current account overdrafts. The code provides important protection to help when things go wrong including when someone is experiencing financial difficulties. The code contains key commitments and detailed notes on how customers should be dealt with through the whole product life cycle from:

  • marketing and account opening
  • maintenance and provision of information on changes to terms and conditions and interest rates.

The code does not apply to non-business borrowing secured on land or to sale finance.

Two guides to help understand the code are available, for personal customers and for micro-enterprise customers. See 'Related links'.