Mortgages, credit card repayments and other borrowing debts can be temporarily halted due to the coronavirus pandemic. The payment freeze rules have been extended a number of times and under current time frames, the schemes will close by October.
Responses to these calls will be heard by the FCA until August 7.
If the responses highlight that further guidance and consideration is needed the FCA assured that they would publish draft counsel for comments under the following timetable:
- Mortgages – draft guidance to be published in late August and final guidance published in early September
- Consumer Credit – draft guidance to be published in mid-September and final guidance published in late September
StepChange, the debt charity, have already shared that they will respond to the call for input by the August 7 deadline.
Richard Lane, the organisation’s Director of External Affairs, commented on the announcement: “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 crystallise.
“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.”
This announcement from the FCA is quite surprising given that Rishi Sunak recently revealed that the government has plans to wind down their support measures in the coming months.
It’s an unfortunate reality that the various support schemes offered by the state have created a large debt which will need to be paid and the chancellor addressed this in his recent “A Plan for Jobs speech”: “I can tell the House we will produce a Budget and Spending Review in the autumn.
“And, we will deal too, with the challenges facing our public finances.
“Over the medium-term, we must, and we will, put our public finances back on a sustainable footing.”