Bankers claim IVA code deal
Bank association says it has agreed on a code of practice for IVA industry
The British
Bankers’ Association has agreed a code of conduct for Individual Voluntary
Agreements, the body has said.
The BBA released a press statement on Friday saying it had hammered out a
deal, though insolvency experts said the moves were not completely finalised.
Banks have long been unhappy about the rise of IVAs, which enable individuals
to slash their debts. Some have argued that the IVA industry pushes too many
people into the arrangements rather than bankruptcy.
Despite the BBA’s statement, Nick O’Reilly, vice-president of R3, the
insolvency trade body, said that there are still some sticking points in the
agreement.
The BBA still has to clear with its members over arbitrary minimum limits
over IVA repayments.
Banks often specify that they will not accept an IVA for less than a certain
number of pennies in the pound.
O’Reilly said: ‘There is still a possibility the BBA will come back and say
that certain banks won’t agree.’
The new guidelines, forecast to come into force as early as February, will
help standardise IVA procedures, particularly the assessment of the income and
expenditure of over-indebted consumers.
The new regime is expected to give banks more confidence that debt management
companies are adhering to set standards.
Further reading:
Ex-PwC man to run finances at Debts.co.uk
KPMG predicts insolvency numbers to hit 120,000
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