Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of introducing stronger regulatory requirements for banks on disclosure of lending criteria to borrowing customers.

The government is committed to ensuring that consumers are able to access credit where appropriate, so that they can achieve their financial goals. However, the government does not believe that it would be appropriate for lenders to disclose their precise lending criteria.

Financial Conduct Authority (FCA) rules require lenders to undertake creditworthiness and affordability assessments before lending to a potential borrower. These rules are based on the principle that money should only be lent to a consumer if they can afford to repay it. The rules set out what is expected of firms, and the sanctions if they lend irresponsibly. Firms are free to use a variety of methods and processes to assess credit risk and affordability, and firms can decide what is appropriate in the circumstances.

However, every lender will have its own idea of the particular profile of person that it wishes to lend to. Such information is commercially sensitive and its disclosure could lead to consumers being incentivised to provide misleading information in their credit application and accessing credit products that might not be appropriate for them.

The government is committed to high regulatory standards and will continue to work with regulators to ensure consumer lending is responsible.