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Guidance: CMA letter to Lloyds on a breach of the SME Banking Undertakings

Competition Markets Authority

September 8
09:01 2020

Letter to Lloyds Banking Group

Details

Lloyds Banking Group (Lloyds) breached the Small and Medium-sized Enterprises Banking Undertakings. Lloyds required SME customers holding a PCA to open a Business Current Account (BCA) in order to progress their application for a loan under the Bounce Back Loan Scheme (the Scheme). Lloyds gave undertakings in 2002 to not bundle BCAs in this way. Lloyds started offering the loans under the Scheme on 8 May 2020.

Lloyds has committed to address its breach of the undertakings by:

  • Implementing and updating processes by middle of September 2020;
  • Advising its customers applying for a loan under the Bounce Back Loan Scheme (BBLS) that they are not required to open or maintain a BCA in order to apply for a Bounce Back Loan and offering customers the choice upfront to apply for a fee-free Loan Servicing account or a BCA;
  • Writing to existing BBLS customers with a BCA to offer the chance to switch to a fee-free loan servicing account; and
  • Providing 2 months notice to customers holding BCA of account charges being imposed.

The action plan on this page sets out information on Lloyds actions to address the breach.

Published 8 September 2020

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