Featured Product

    FCA Issues Update on Tailored Support Guidance Amid Ongoing Crisis

    March 25, 2021

    FCA published the final guidance to provide support to mortgage customers facing payment difficulties due to circumstances stemming from the COVID-19 pandemic. Section 7, titled "Repossessions," of this guidance has been updated on March 25, 2021, with effect from March 20, 2021, to set out the FCA expectations in respect of repossessions from April 01, 2021. This guidance is for firms dealing with mortgage customers experiencing payment difficulties due to coronavirus, including those who cannot resume payments after taking payment deferrals under the Payment Deferral Guidance, and for firms considering or taking repossession action. The guidance originally came into force on September 16, 2020 and remains in force until varied or revoked.

    The guidance confirms that, from April 01, 2021, subject to any relevant government rules that prevent enforced repossessions for public health reasons, firms taking steps to enforce repossession of properties should only do so as a last resort in accordance with the FCA rules, updated guidance, and normal legal processes. The guidance also highlights that, as the deadline to apply for a payment deferral ends on March 31, 2021, FCA wants to reassure consumers in financial difficulty that support will continue to be available under the Tailored Support Guidance. FCA also published a report on how the firms are implementing this tailored support. The report is relevant for mortgage lenders and administrators, smaller deposit-taking lenders, non-bank mortgage lenders, credit card and loan providers, high-cost credit firms, and motor finance firms. The report found that firms have progressed well in implementing the Tailored Support Guidance and have acted quickly to build their capacity, though the report also highlights the improvement areas for firms. The following are the key findings of the report:  

    • Consumers have generally been able to get support as they come to the end of a payment deferral. FCA has not identified any systemic issues with firms' ability to meet the demand from customers seeking further help. The support identified in the report has typically been short term in nature, given the uncertainty of customers’ financial circumstances during the pandemic.
    • All assessed firms had vulnerable customer policies in place and, as noted, 94% of mortgage firms and 64% of credit firms had reviewed or added to these policies light of the pandemic. Firms are encouraged to review the recently published guidance on vulnerable consumers and to embed relevant aspects into their processes to ensure that vulnerable customers are treated fairly.
    • Due to the pandemic, some firms anticipated an increase in demand from customers in financial difficulty and recruited more staff to address that demand. Thus, there has been a significant increase in inexperienced staff helping customers, which may lead to an increased risk of harm. Firms are expected to ensure that all staff members are adequately trained and supervised to ensure that the right support is provided to customers.
    • Some firms accelerated plans to automate aspects of the customer support journey. FCA found that, in general, these automated approaches were easy to navigate with minimal steps and helpful menus for customers to select from. However, some firms could improve the ease of access to non-digital support.

     

    Related Links

    Keywords: Europe, UK, Banking, COVID-19, Credit Risk, Payment Deferrals, Consumer Credit, FCA

    Featured Experts
    Related Articles
    News

    EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0

    EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.

    April 08, 2021 WebPage Regulatory News
    News

    EBA Updates Lists of Entities for Use in Capital Calculations under SA

    EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.

    April 08, 2021 WebPage Regulatory News
    News

    MAS Amends Notice on Related Party Transactions of Banks

    MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.

    April 08, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Euro Short-Term Rate

    ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.

    April 07, 2021 WebPage Regulatory News
    News

    EBA Consults on Standards Related to FRTB-SA

    EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).

    April 07, 2021 WebPage Regulatory News
    News

    PRA Proposes Rules Related to IRB Approach for Credit Risk

    PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.

    April 07, 2021 WebPage Regulatory News
    News

    BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK

    The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.

    April 06, 2021 WebPage Regulatory News
    News

    FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks

    FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.

    April 06, 2021 WebPage Regulatory News
    News

    OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks

    OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.

    April 06, 2021 WebPage Regulatory News
    News

    EU Amends CRR and Securitization Regulation in Response to Pandemic

    To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).

    April 06, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6826