Building Societies Abandon The Lending Code

A new version of the Lending Code has been released, simply omitting the name of the Building Societies Association which has ceased sponsoring the farcical idea that UK retail lenders should be allowed to regulate themselves.

Banks and credit card issuers still think it's a good idea though...

Banks Make A Mockery Of Their Self-regulatory #LendingCode

Readers may still be surprised to hear that Britain's retail banks remain self-regulated when it comes to their lending activities.

That means it's the job of their own Lending Standards Board to check that subscribers are complying with the self-regulatory Lending Code, not the Financial Conduct Authority (although there is a 'memorandum of understanding' between the two bodies written on the back of an envelope somewhere).

Of course, the Lending Standards Board tends to give its own members a clean bill of health...

Which is puzzling, because the LSB has just made the rather unfortunate discovery after reviewing complaints procedures that there is "mixed evidence to indicate that issues, once identified, [are] being reviewed specifically against the requirements of the Code."

In other words, the banks are blowing raspberries at the Code.

So, um, how could the LSB have given the banks a clean bill of health before now?

Does the FCA care? Or, in regulatory speak, "Quis custodiet ipsos custodes?"

It's been a farce from the very beginning.

Government Hog-tied by its Own Red Tape

How nicely ironic to see the institutions responsible for our soaring regulatory burdens find their own compliance such a struggle.

The Price of "Free" Software

The recent Open Source Summit, alerted me to the fact that perhaps relatively few business people realise the commercial implications of relying on open source software.

A glance at the excellent programme shows why this should come as no surprise: there's an awful lot to get your head around just to understand what open source software is in the first place.

But, let’s not lose sight of the wood for all the trees (the history and philosophical debate between the Open Source Initiative and the Free Software Foundation, the vast array of licences and nor the complexities of GPL2 vs GPL3 and AGPL3).

The fact is that software developers can easily import any computer code via the Internet without fully understanding the licence obligations. What seems "free" code can actually come with an obligation to licence the source code for you proprietary product to the world, free of charge.

So, as Kat McCabe of Black Duck explained, sophisticated buyers of businesses are now requiring an audit of the source code for the target's IT systems and products in an attempt to exploit the target's inadvertent use of open source software, and reduce the price for acquiring the business. Overseeing that due diligence is Jim Markwith's legal role at Microsoft. And it explains the incredible degree of licensing rigour imposed on Nokia's open source programme by Dietmar Tallroth.

This is not an argument against using open source software. But anyone with an eye on the value of their business ought to get a handle on how their developers are operating and consider regular audits of their source code.