Santander UK is reportedly 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, according to Sky News.
Santander UK, which is Britain’s fifth-largest high street bank, reportedly 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 reportedly 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 reportedly 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 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, told the outlet: “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.”
City A.M. approached Santander UK for comment. Its letter to the LSB reportedly stressed that the withdrawal “in no way implies any intention to reduce the standards of consumer protection we provide – indeed, quite the opposite”.