BBA calls for tighter loan provision 'regulation'

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BBA calls for tighter loan provision 'regulation'

Thu 5th Jul 2007

All loan providers should be operating within the remit of the banking industry's code, the British Bankers' Association (BBA) has said.

A growing number of loan and credit deals are being offered by lenders other than banks but such lenders fall outside the remit of the Banking Code and are therefore not protected by its responsible lending provisions.

Adhering to the provisions of the code, banks make a decision on whether to give a loan based upon internal controls and credit reference agencies.

However, the BBA believes that increasing numbers of firms are providing credit to customers who do not meet banking criteria.

"When a gap opens between what a borrower wants and what a bank wants to lend, too often an irresponsible lender steps in," said Angel Knight, chief executive of the BBA.

She added: "There are certainly responsible lenders among the rest, but how is a consumer to know who they are or what their lending rules are?"

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