A PYMNTS Company

UK: CMA takes a swing at small business loan, account bundling

By  |  October 22, 2014

The UK’s Competition and Markets Authority has decided that HSBC Holdings violated competition laws by forcing borrowers to open an account before they were loaned any money, say reports.

    Get the Full Story

    Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

    yesSubscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    The CMA ruled that both HSBC and First Trunk Bank, owned by Allied Irish Banks, violated competition rules by requiring that small- and medium-sized enterprises open accounts before they were given a loan. Reports say the CMA has sent a letter to the banks outlining directions on how they must comply with rules regarding SMEs.

    The practice of bundling a business loan with a bank account was banned in 2002, according to reports, for both of these banks and six others.

    The CMA’s letter is part of the regulator’s broader investigation into small-business lending and checking accounts. Preliminary findings showed a lack of competition in the industry, reports say; just four banks control more than 75 percent of the market.

    Full content: Bloomberg

    Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.