Should UK consumers be able to appeal against loan rejections?
Lord Mandelson's plans to allow UK businesses to formally appeal against loan rejections from UK banks has opened a potential can of worms for the UK authorities. If UK businesses are able to appeal against loan rejections, and potentially see these initial decisions reversed, should UK consumers be given the same rights of appeal regarding loan rejections?
It is obvious that the UK government is looking to bring small business, medium business and large business players back onside as we approach the election although by potentially setting up a statutory right to appeal against loan rejections is this going to cause more problems than it will solve?
It is no secret that UK banks have tightened their lending criteria over the last six months, much of this at the insistence of the UK government, and despite many consumers having impeccable credit records it is still difficult to obtain loans of a significant size in the UK. The first question has to be, is it right to force a UK bank to reverse a decision? The second question is, if UK businesses have a right of appeal then should UK consumers also have similar rights?
Share this..
Related stories
Company insolvencies set to rise
A report by Begbies Traynor has concluded that there are around 127,000 UK companies which are suffering "significant financial distress". This comes at a time when the UK economy is starting to waver and the fragile nature of the ongoing recovery has been laid bare for all to see. It is estimated that these 127,000 companies owe between them around £70 billion which is a 26% increase on the firs...
Read MoreWhen will the money market returns to normal?
Over the last two years we have seen worldwide money markets struggling to provide funding to the financial sector purely and simply because of a fear of default. Ultimately this has led to a significant increase in the cost of money around the world which has then impacted upon areas such as mortgages, loans, credit cards and consumer finance in general. Even though UK base rates remain at 0.5%,...
Read MoreIs the era of low cost credit over?
With UK base rates currently stuck at 0.5% the cost of debt in the UK has never been lower. However, what has changed is the criteria needed to qualify for the relatively low cost credit offers available which has seen many people locked into their long-term higher rate arrangements. But will we see low-cost credit return in the future?
As we have mentioned on numerous occasions, th...
UK government to merge Northern Rock and Bradford & Bingley loan books
Today the UK government received approval for its intervention which effectively prevented the collapse of the Bradford & Bingley back in 2008. The European Commission has today confirmed that the UK government acted within the rules and regulations and has been given the go-ahead to restructure what is left of the Bradford & Bingley operation, i.e. the company's loan book. So what plans has the g...
Read MoreIcelandic credit rating under negative review
Stand and Poors, the renowned credit rating agency, has today placed the Icelandic national credit rating on negative alert after the banking collapse compensation bill was blocked by the Icelandic president. This is yet another massive blow to the Icelandic government who are still reeling from the after-effects of the current blocking of compensation payments to the UK government and the Netherl...
Read More