A U.K. banking executive says the country needs to resolve its unfair auto-lending practice investigation.
Great Britain’s Financial Conduct Authority (FCA) said in July that it was extending that probe, something that doesn’t sit well with William Chalmers, finance chief for Lloyds.
“A delay isn’t what we want to see, we want to see a speedy resolution by the FCA,” said Chalmers, whose comments at a Barclays event in New York City Monday (Sept. 9) were reported by Bloomberg News.
The executive added that the postponement — which the FCA said was due to delays in receiving data as well as legal challenges — had caused uncertainty and investor concerns.
The FCA announced the investigation earlier this year, and now plans to detail the next steps in its process in May, and not this month as originally planned.
Lloyds, which is England’s largest auto financing lender, set aside $570 million earlier this year for possible compensation and other costs tied to the review, which is examining commissions on car loans.
As noted here at the time, almost 90% of new cars sold in the U.K. — in the days when interest rates were low and credit was “plentiful” — were made via financing deals. Dealerships could take in thousands for themselves and for banks by pushing up interest rates offered to customers, a practice known as “discretionary commission arrangements.”
The FCA outlawed the practice in 2021, and has said this move saves consumers 165 million pounds ($215 million) per year. But after receiving a surge of complaints from customers who were sold these loans, the regulator began taking further action, reviewing loans from as far back as 2007.
In other Lloyds news, the bank last week launched a partnership with artificial intelligence (AI) platform Cleareye.ai.
The collaboration, said to be the first of its kind in the U.K., will use AI to streamline processing and compliance checking for trade finance documentation.
“The advanced technology will use optical character recognition (OCR), machine learning, and natural language processing algorithms to extract critical information from trade documentation,” the release said. “This includes digital and paper-based import and export documentary letters of credit, documentary collections, undertakings and trade loans.”
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