The Standards of Lending Practice (previously the Lending Code) are voluntary and set the benchmark for good lending practice in the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
, outlining the way registered firms are expected to deal with their customers throughout the entire product life cycle.
The Standards of Lending Practice for personal customers covers
loan
In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that d ...
s,
credit card
A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...
is,
charge card
A charge card is a type of credit card that enables the cardholder to make purchases which are paid for by the card issuer, to whom the cardholder becomes indebted. The cardholder is obligated to repay the debt to the card issuer in full by the ...
s and
overdraft
An overdraft occurs when something is withdrawn in excess of what is in a current account. For financial systems, this can be funds in a bank account. For water resources, it can be groundwater in an aquifer. In these situations the account is s ...
s. The Standards of Lending Practice for business customers covers loans, credit cards, charge cards and overdrafts, with a separate set of Standards covering
asset finance
A lease is a contractual arrangement calling for the user (referred to as the ''lessee'') to pay the owner (referred to as the ''lessor'') for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial ...
.
Each section of the Standards contains:
* A customer outcome;
* An overall statement of how a firm intends to achieve this outcome; and
* A detailed set of standards that demonstrate the approach.
While a number of these outcomes are well established within firms, new areas do emerge from time to time. As and when they do, the Standards of Lending Practice will evolve to help registered firms develop their approach to them.
References
The StandardsThe Standards for personal customers
The Standards for business customersOther voluntary standards
External links
Lending Standards Board
Banking in the United Kingdom
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