New Lending Code 11: mental health, MALG guidance

183. Further and more detailed good practice guidelines have been produced by MALG and are available at: http://www.moneyadvicetrust.org/download.asp . The MALG guidelines will not be monitored and enforced by the Lending Standards Board. [Reproduced with the kind permission of the British Banking Association -see link below]

Because I had read many of the documents some time ago, and not got round to all of them, combined with a period when my attention had to be elsewhere, I had confused the guidelines with the submission to the 2007 review of the Banking Code, and both with some parts of the Consumer Protection Regulations.

Albeit, I have this clear now and apologise should I have attributed rule and regulation to a document which it is not in. But the effect of my comments is unaltered.

While the guidelines are given a somewhat detached status, since they are to be neither monitored nor enforced by the standards board, they remain specified good practice. As such they will figure in considerations of the actions of creditors and debt collectors in other places, and cannot be ignored.

The guidelines were of great value when they were published in 2007. While they are not directly included in the Lending Code they are, by this paragraph, made best practice in carrying out the previous 10 paragraphs. This is an invaluable advance for those affected.

While there is no mention of the other vulnerable debtors – elderly and poor – in the new code or in the guidelines, their link in the CPRs should leave no creditor in any doubt that similar care is required for them.

There are 15 main heads in this document and invaluable additions, such as a listing of relevant mental conditions.

In my judgement they leave creditors for no excuse to behave inappropriately in relation to those suffering, once the creditor has been advised of the condition involved. Nor, indeed, against those who fall into the other two vulnerable groups. I would add more to the vulnerable areas.

This is because of the extreme unbalance in the ‘playing field’ between the enormous companies and the defaulting individuals who have no experience or knowledge of the area. For that group of scurrilous companies – some of the biggest of banks – who follow an aggressive  path, I feel these regulations still lack the teeth that are needed to protect.

Well, I suppose these gripes are part of my shopping list for the next reviews in all areas!

That said I believe thanks and congratulations are due to all those who have worked extremely hard over many years to make these new paragraphs and  their guidelines part of the body of rules.

Joseph Harris, Debt Control Man
Author: Control Your Debt Crisis on Your Own Terms
http://www.controlyourdebtcrisis.co.uk
The new Lending Code is here http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=1758
The MALG 2007 submission to the review of the code is here http://www.moneyadvicetrust.org/download.asp
And the Treasury Select committee view is here http://www.publications.parliament.uk/pa/cm200405/cmselect/cmtreasy/274/27406.htm#a18

Tags: Banking Code, Consumer Protection Regulations, creditors, debt collectors, lending standards board, MALG, vulnerable