FCA issues call for input on pandemic payment difficulties

The Financial Conduct Authority (FCA) has issued a call for input into how lenders 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 is seeking view on what should happen to consumers coming to the end of a second payment deferral under the temporary guidance to firms on providing payment deferrals for mortgage and consumer credit products. They are also asking for views on whether we should extend our current guidance beyond the current deadline of 31st October 2020.

Responding to the announcement StepChange Director of External Affairs Richard Lane said “As the FCA recognises, the picture of who will need further help and what kind of help they will need is complex.”

“The demand for debt advice will increase as more people roll off the temporary payment deferral schemes and see their financial difficulties crystalline.”

“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.”

“We are working hard to ensure that we are fully equipped to provide customers who find themselves in this situation with the right range of guidance and solutions to support them.”

“We are thinking especially hard about those customers who may need only a relatively short-term period of recovery, but who cannot afford to resume full payments straight away, and we are putting in place brand new ways of helping, so that we are able to support them in the most suitable way when the time comes.”