LSB closes after 15 years of independent oversight in financial services

As of 31 October 2025, the Lending Standards Board (LSB) has closed, after a solvent wind-down of its operations.

The LSB has summarised its impact and legacy in a final report on independent oversight and customer outcomes, calling for the gap in standards and oversight created by its closure to be filled.

The report highlights that the need for independent oversight has not disappeared, but in 2024 and 2025, the UK’s largest banks chose to withdraw from the LSB’s business standards, necessitating its closure. With economic pressure and political emphasis
on deregulation, other firms found it harder to justify their participation, such that the LSB announced in June 2025 its decision to wind down.

The LSB is somewhat critical of the banks’ decision, noting that many named the Consumer Duty as a reason for their withdrawal, even though the Duty was not designed to apply to SME lending and provides no independent scrutiny for customers,.