Santander UK to quit lending standards body over risk of regulatory confusion
Santander UK is terminating its membership of a major lending standards body to avoid confusion over the duplication of voluntary and regulatory industry standards.
The UK arm of Spain’s largest bank last week served notice of its intention to quit the Lending Standards Board, a self-regulatory body aiming to drive fair customer outcomes in financial services.
Santander UK, which is Britain’s fifth-largest high street bank, cited the Financial Conduct Authority’s introduction of Consumer Duty and the implementation, due in October, of new fraud reimbursement rules from the Payment Systems Regulator.
In its letter to the LSB, Santander UK said these new regulatory frameworks would “supersede the existing voluntary industry standards that are set out in the current LSB codes”.
“This inevitably leads to duplicative regulation and can create confusion among staff and customers about which standards apply.”
The bank added that quitting the LSB would ensure “more certainty and confidence over the regulatory landscape. Reducing duplicated effort, thereby enabling us to concentrate resources on other important customer and regulatory priorities”.
The LSB recruited a series of heavyweight figures to its board last week, including IFS director Paul Johnson and broadcaster Iain Dale.
Sky News, which broke the story, reported that a number of other major banks involved with the LSB were understood to be considering following Santander UK’s decision.
Anna Roughley, the LSB’s head of insight, said: “Registration with the Lending Standards Board enables financial services firms to send a clear signal that they are committed to achieving the right customer outcomes where there are heightened risks to customers or an absence of statutory regulation.
“We work closely with regulators and our registered firms to drive needed improvements in customer outcomes, and to ensure our Standards and Codes add value to the UK’s wider regulatory environment.”
A Santander UK spokesperson told City PM: “Santander UK is committed to upholding high standards and delivering fair outcomes for our customers. Our announcement will not undermine the standards of consumer protection we provide.
“We have welcomed the role of the LSB in driving improvements in standards across the sector. However, we believe the standards set by the Consumer Duty supersede the LSB codes. Our decision was driven by the need to avoid duplication of regulation and to enable us to use our resources effectively and ensure good customer outcomes.”