Nice Loans.co.uk > News > Responsible Lending through the Banking Code
Banking Code aims to ensure loans are affordable.
With sources of credit becoming more proliferated, consumers are faced with all manner of attractive loan and mortgage offers wherever they look it seems.
Although this wide choice of offers may be good news for the borrower, the number of companies operating in this sector has also grown rapidly, placing great strain on the regulatory bodies that are tasked with controlling them.
Although the FSA is typically seen as the main body responsible for the operations of finance-related businesses in the UK, industries such as loans and mortgages have also be self-regulating for many years too. This however is changing and stricter guidelines are being implemented to control and police the way these companies promote their products.
This is all good news for the borrower, as they will be less likely to sign up for products they are not ideally suited to and will be less likely to enter arrangements which could worsen their personal financial situations. This has not always been the case in the past when advice was either not provided or may have been misleading. Tha Code basically tries to make companies ensure that borrowers will be able to repay any monies advanced and they will be given appropriate help if they experience repayment difficulties.
One of the ways in which this new control is being implemented is through ensuring compliance with the Banking Codes. Businesses that subscribe, are monitored by the Banking Code Standards Board (BCSB), who make sure that banks, building societies, credit card providers and other lending institutions comply with the codes. The BCSB is not a regulatory or government body, so subscription is not compulsory, but the BCSB aims to recruit more and more businesses to promote responsiblity and self-regulation.
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