Not upheld: irresponsible lending - affordability and creditworthiness assessment complaint against Brent Shrine Credit Union Limited trading as My Community Bank (MCB)

Decision detail

Summary

Miss L complained that MCB lent to her irresponsibly in December 2024 for a £6,000 fixed sum loan without adequate affordability checks. She argued her multiple existing credit commitments, high overdraft utilisation, and the fact that her estimated disposable income (£209) was less than her monthly repayment (£216.80) indicated financial pressure and unsustainable borrowing. The ombudsman found MCB's checks were reasonable, including credit file review, income verification, and disposable income calculation using ONS data. With no missed payments or defaults visible on her credit file and a stated debt consolidation purpose, the ombudsman found MCB's lending decision was fair and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found MCB's checks were reasonable and proportionate for the loan amount. The credit file showed no signs of financial difficulty or missed payments, and MCB's calculation of disposable income of £209 monthly (after the £216.80 loan repayment) was based on verified income and reasonable use of statistical data for living expenses. The ombudsman considered it reasonable for MCB not to place excessive weight on existing credit commitments given the stated purpose was debt consolidation, which would improve Miss L's overall position. The ombudsman rejected the argument that high overdraft utilisation alone should have triggered further checks, and found no obligation to review bank statements prior to lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website