THE LENDING Standards Board (LSB) has revealed plans to extend its Standards of Lending Practice to the peer-to-peer lending and invoice finance sectors next year.
The voluntary standards came into effect in 2017 for loans, credit cards, overdrafts and charge cards.
They aim to set a benchmark for good lending practice in the UK by outlining how firms should deal with personal and small business customers.
The LSB has now extended the standards to asset finance and commercial mortgage products.
Speaking at an event in London on Tuesday, Dave Pickering, chief executive of the LSB, said firms operating in the asset finance and commercial mortgage sectors will be given until 30 September to conduct a “gap analysis” showing which standards they are currently meeting and which ones they need to do further work on.
The LSB will then develop a guide providing examples of “what good looks like”, Pickering said.
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The third roll-out of the Standards of Lending Practice will be to P2P lending and invoice finance products.
“We will probably look at P2P and invoice finance next year,” Pickering said. “We first need to get firms to embed the current standards and get traction before we look at other areas.”
There are currently 20 LSB-registered firms, who undergo a thorough risk assessment review process that looks at their controls and governance, and must ensure that the LSB’s standards are built into firm-wide policies. Newly-registered firms are given help in achieving the standards.
As well as extending its remit to new products, Pickering said a key focus of the LSB over the next 12 to 18 months will be resolving the issue of late payments in the small business sector.
Paul Uppal, the UK’s Small Business Commissioner, highlighted figures suggesting small businesses are owed around half a trillion pounds in late payments. He said there were examples of “shocking practices” in the sector.
“Part of the problem is that late payments get a big spotlight and then they drop off the radar,” he said. “I’d like to see them kept in the spotlight.”