Good Practice Lending Guide

This module describes how organisations should define their (credit) risk appetite. The risk appetite describes the different risks that an organisation is (and is not) willing to accept as part of its lending strategy. 

This module describes how to formulate a lending policy in line with an organisation’s risk appetite. 

This module describes how organisations should treat customers to comply with the FCAs principle of “Treating Customer’s Fairly” and the more recent FCA principle of “Consumer Duty.” 

The Portfolio MI module explains the types of portfolio level reporting that is required to understand how the business is performing over time. 

This module covers the governance frameworks and forums that should be in place. This also covers the process for reviewing, updating and internal audit/sampling to ensure adherence to policies. 

This module describes how to put together a proposition for a credit product that meets business objectives, aligns with an organisation’s risk appetite, and meet the needs of customers. Principles for setting credit limits and risk-based pricing will also be covered. 

This module describes the different approaches that can be adopted for calculating customers’ income and expenditure. 

This module describes what a credit reference agency (CRA) is, how CRAs operate and the products and services that they provide. 

This module explains how customer should be dealt with at various stages of their relationship with a lender. It covers the full arrears lifecycle from pre-delinquency through to arrears, default, write-off and post write-off recoveries. 

The different ways to account for provisions for bad and doubtful debts (impairment) are presented in this module, with reference to the specific requirements for some types of lenders. 

This module looks at the application process and customer journey from initial enquiry through to completed application. 

This module covers Know Your Customer (KYC) requirements and fraud prevention. 

This module covers the requirements for effective scorecard monitoring to ensure that the predictions made by the scorecard continue to be accurate in line with their design parameters. The PRA’s principles for Model Risk Management (MRM) are also covered here. 

This module covers the data infrastructure that organisations need to support credit risk management activities while remaining compliant with GDPR data protection principles via an appropriate data retention policy. 

This module details what good practice looks like in terms of both referral to debt advice services for customers with debt problems and the information and tools that are available to customer who may need financial advice.