Age discrimination by credit providers sparks controversy
Monday, December 10th, 2007Older people often find it more difficult to obtain loan approval than their younger peers.
The justification given by banks and lending agencies stems from concern over whether older applicants will live long enough to pay back the loans offered.
An independent review of the Banking Code conducted by banking consultant and former Bank of England executive Mike Young recommends that banks take pains to avoid such discrimination.
Meanwhile, a representative of the British Banking Association gave the opinion that the Code should not be altered on this matter – factors, such as age, that contribute to a proper assessment of loan viability should not be dismissed out of hand, nor should they become obstacles to good lending policies.
Mike Young’s report, which was received last month to mixed reactions, recommended greater clarity on loans and savings accounts and a more responsible attitude towards consumers who represent a credit risk to banks.
The report was criticized by consumer groups for not being tough enough on issues such as bank charges.
The right of lending institutions to practice age discrimination has been upheld, the BBC reports.