The bank, which was partially owned by the taxpayer, provided Hunt with a secured loan between May and 2 July last year after Barclays called in his loan.
Barclays made the decision after reading reports about his libel battle with The Sunday Times.
The libel battle centred on a 2010 article that claimed that Hunt was a “crime boss” who was seeking to cash in on derelict land around Stratford’s Olympic Park.
However Lloyds Bank, which is required to vet applicants, failed to blacklist Hunt.
Labour MP John Mann, who sits on the Treasury select committee, demanded an FCA inquiry into the matter.
He told The Sunday Times: “The Treasury should have ensured that Lloyds did the due diligence. There are honest and solvent businesses in my constituency that Lloyds has refused to send money who will be shocked to see how lax their systems have been on this.
“I intend to look into this matter further and demand that the FCA carry out an investigation.”
The loan, to Hunt’s (UK) Properties, was secured against assets including his waste disposal business in Dagenham and a £1m life insurance policy he had taken out through Legal & General.
Lloyds said it would not comment on individual cases.
