// FEATURE // they experienced challenges when applying for lending, compared to 69 % of white Britishled SMEs; and 44 % of ethnic minority-led businesses have made a complaint about their lender in the last 12 months, more than double the 19 % of white British-led SMEs.
These findings built positive momentum among key stakeholders for the development of a new voluntary code focused on inclusion and growth for ethnic minority-led businesses – which are among the UK’ s most ambitious enterprises. But with the LSB’ s closure – and despite a growing number of commitments from firms keen to sign up to the code – progress on this important work is now paused and a credible framework for driving change risks being lost.
Lovell concluded:“ Our experience shows that responsible oversight and sustainable growth go hand in hand, a view shared by the firms that have chosen to remain registered with us. Trust and confidence are essential ingredients for long-term success and there is a real risk that the hard-won lessons of the past are being overlooked.
“ Since our establishment in the wake of the financial crisis, the LSB has played a pivotal role in helping the financial services sector grow responsibly – setting and overseeing best practice, raising standards and delivering meaningful improvements in outcomes across SME lending, personal lending, financial inclusion and fraud prevention. The LSB was formed to make sure people were protected from financial risk in areas not covered by statutory regulation. Any observer of our rapidly changing financial sector can see that such protections are still needed.
“ We are grateful to all those who have supported our mission over the years, whether through registration, collaboration or a shared commitment to better outcomes for consumers and businesses. While the LSB’ s operations will cease later this year, the principles we championed – fairness, transparency and independent assurance – remain as important as ever. Our legacy will endure in the standards we set, the firms we worked with and the outcomes we delivered.”
The LSB will continue operating until 31 October, 2025, supporting registered firms through the
transition and providing guidance as needed. Each firm will receive a final oversight summary by the closure date, along with practical information to help manage the process.
A decade of impact and innovation
Over the past decade-and-a-half, the LSB has pioneered voluntary protections that often pre-dated and shaped formal regulation – including the outcomes-based Standards of Lending Practice for personal customers( 2016-2025), which directly anticipated the FCA’ s Consumer Duty. Its oversight of the FCA’ s Credit Card Market Study remedies helped reduce interest and penalty charges for thousands of customers and improved understanding of complex product terms. The LSB’ s Contingent Reimbursement Model code for Authorised Push Payment( APP) fraud( 2019-24) protected over 90 % of APP scam victims, raised reimbursement rates to 73 %( compared to just 28 % outside the code) and restricted average losses to a level almost four-times lower than seen in cases outside the code. Unlike the Payment Systems Regulator’ s scheme for mandatory reimbursement, introduced in late 2024, the code also covered prevention and detection. By 2024, APP fraud cases had begun to fall for the first time. The LSB also drove sector-wide improvements in accessibility and vulnerability, including catalysing adoption of deaf-access tools across the industry following its 2023 research report. �
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