Howells to call for banking credit code

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The Independent Online

Kim Howells, the consumer affairs minister is poised to summon the big banks for a summit meeting before the end of the month in an attempt to curb what he sees as a growing trend towards irresponsible consumer lending.

Kim Howells, the consumer affairs minister is poised to summon the big banks for a summit meeting before the end of the month in an attempt to curb what he sees as a growing trend towards irresponsible consumer lending.

The minister will call for banks to agree to a voluntary code of practice to stop banks pushing credit in the direction of customers who cannot afford it. The request follows the announcement earlier this year by Gordon Brown the Chancellor, of so-called CAT standards (cost, access, transparency) for credit cards and a suggestion that they could be extended to other credit products.

The government believes part of the answer lies in greater transparency so that customers know exactly how much they will have to pay and over what period.

Mr Howells crossed swords with the banks earlier this year in the row over attempts by Barclays Bank to introduce user charges for its automatic teller machines.

Following the publication of the report by Don Cruickshank, which accused banks of making £5bn excess profits, the government launched a formal competition inquiry into small business banking. The banks expect to hear shortly on the government's plans for implementing the other main plank of the Cruickshank report - the establishment of a payments watchdog called Paycom.

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