Non-bank lenders are accounting for a growing proportion of instant loans and credit deals to UK consumers. However, as it is not imperative for these lenders to comply with the banking code, they are not protected by its provisions for responsible lending, stated British Banking Association (BBA) chief executive Angela Knight, in a letter to shadow treasury minister Mark Hoban.
When a gap opens between what a borrower wants and what a bank wants to lend, too often an irresponsible lender steps in. Only around 63% of unsecured borrowing now comes from the banks. There are certainly responsible lenders among the rest, but how is a consumer to know who they are or what their lending rules are?
The letter coincides with the publication of Lending Money Responsibly, a free BBA fact-sheet containing the relevant sections of the banking code and a five-point responsible borrowing plan for consumers.
