Not upheld: irresponsible lending - proportionality of creditworthiness and affordability checks complaint against North Edinburgh and Castle Credit Union Limited trading as Castle Community Bank (CCB)

Decision detail

Summary

Mr K complained that CCB irresponsibly lent him £15,000 in July 2025 without carrying out proportionate creditworthiness checks, claiming the loan was unaffordable. CCB defended their decision, stating they had completed full underwriting checks including creditworthiness and affordability assessments. The ombudsman found that CCB's automated checks (credit file review, CRA income verification) were reasonable and proportionate, that the credit file showed no signs of financial difficulty, and that the calculated disposable income of £547 per month appeared sufficient to support the loan. The ombudsman rejected Mr K's arguments that bank statements should have been obtained and that higher credit commitment figures should have been used, finding these were not necessary for reasonable checks. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that CCB's checks were reasonable and proportionate. The credit file showed no signs of financial difficulty or persistent debt reliance. CCB verified income via CRA, used declared rent and statistical ONS data for other expenses, and included a £150 buffer. The calculated disposable income of £547 per month appeared sufficient. While CCB could have used a higher figure for existing credit commitments, this would not have changed the affordability conclusion. The ombudsman rejected the argument that bank statements should have been obtained, finding this was not necessary for reasonable checks. The loan purpose of debt consolidation provided additional confidence that disposable income would improve. The ombudsman noted Mr K was making repayments at the time of complaint.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website