Correspondence
CMA letter to Lloyds on a breach of the SME Banking Undertakings
Letter to Lloyds Banking Group for non-compliance with the Small and Medium sized Enterprises (SME) Banking Undertakings 2002.
Documents
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
- 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.