FCA presents proposals for payment holidays for borrowers in difficulty: CityAM
The Financial Conduct Authority (FCA) presented its proposals to strengthen support for consumer credit borrowers struggling with the financial impact of the Covid-19 pandemic.
Earlier this week, the watchdog announced plans to extend credit cards for payment holidays, car financing, personal loans and pawnshop as England prepares to enter a new national lockdown tomorrow.
Under the proposals announced today, consumer credit customers who have not yet had a payment holiday during the pandemic would be eligible for two payment deferrals lasting up to six months.
Those who have already received a payment holiday would be eligible for another postponement of up to three months, the regulator said. Borrowers with high-cost short-term credit products such as payday loans would be eligible for a one-month deferral of payment, if they haven’t already taken one.
According to the proposals, customers would have until January 31 to request their first payment holiday.
“We recognize the challenges many consumers face as the coronavirus crisis unfolds, and we are working to ensure that support remains available to consumers who need it,” said Sheldon Mills, interim executive director of FCA’s strategy and competition.
“We know that many consumer credit borrowers are vulnerable. This is why tailor-made support reflecting the individual situation of borrowers will always be offered and remain the most appropriate option for many.
However, Mills added, “It is in the long-term interest of borrowers to only accept deferral when absolutely necessary. Those who are able to continue paying should do so.
The FCA invites comments on new proposals by 10 a.m. on November 6.