The Financial Conduct Authority is asking for input into how the industry should handle ongoing payment difficulties among people who have taken coronavirus payment holidays but are unable to resume their payments in full when these holidays expire.
The FCA wants your views on what should happen to consumers coming to the end of a second payment deferral under its temporary guidance to firms on providing payment deferrals for mortgage and consumer credit products.
It is also asking for views on whether it should extend its current guidance beyond the current deadline of 31 October 2020 and, if not, what if anything should take its place.
FCA lays out guidance on protecting vulnerable consumers
The FCA’s measures to help consumers affected by the impact of coronavirus have included temporary guidance setting out how it expects firms to support mortgage customers facing temporary payment difficulties because of the pandemic, including payment deferrals.
It recently confirmed that the temporary guidance would remain in effect until 31 October 2020. However, many consumers who have been given a second payment deferral under its temporary guidance will have deferrals that end from September onwards.
So the FCA wants to get early views on the support needed by consumers who have already benefited from its temporary guidance but remain in difficulty.
StepChange has welcomed the FCA’s move: “As the FCA recognises, the picture of who will need further help and what kind of help they will need is complex,” said StepChange director of external affairs Richard Lane.
“It is interesting to see the regulator setting out a firm expectation that it does not expect a blanket extension of payment holidays to be the right answer generally for people who cannot afford their payments. Instead, the FCA expects lenders to show a more considered view of forbearance – with all that that implies, in the form of putting in place affordable repayment plans for those who need them.”
If you want to give your opinion to the FCA you can email [email protected]; the deadline is 7 August.
If responses show that further guidance is needed, the FCA will publish draft guidance for comment in late August with final guidance published in early September.