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Responsible lending must be key commitment for banks, says the Banking Code

Banks and building societies all have commitment to demonstrate responsible lending under the Banking Code, a spokesperson has said. The Banking Code is a voluntary set of rules followed by banks and building societies in their relations with personal customers, including commitments to heed the priority of customer's debts, for any repayment plan to "leave the customer with sufficient money for reasonable day-to-day expenses", not to "subject customers to harassment or undue pressure when discussing their problems" and accept token offers on debts in certain circumstances.Adrian Lloyd, a spokesperson for the banking regulatory service said that another commitment for banks and building societies is that in cases of financial difficulty "people must be treated sympathetically and positively." He added: "What the code actually says is: 'We will assess whether we feel you will be able to repay the borrowing.' "It's something we do take seriously, ensuring that lenders under our code do dually go through a proper credit assessment and not necessarily get into difficulties."The issue of responsible lending has increasingly come to the forefront as personal dept in the UK grows - figures from Credit Action suggest that personal debt in the UK is increasing by £1 million every 4 minutes.

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