Featured Product

    FCA Highlights Continued Support for Borrowers Amid Pandemic

    October 27, 2020

    FCA published the results of a consumer survey amid pandemic and is urging consumers struggling to make repayments to speak to their lenders about options available to them. FCA conducted a survey on Vulnerability and Harms among more than 7,000 individuals during the pandemic. The survey found that 12 million people in UK had low financial resilience, indicating that they may struggle with bills or loan repayments. FCA has put in place a package of support for individuals in difficulty to ensure help is available after October 31, 2020.

    Due to the impact of the pandemic, many of those who have experienced changes in employment and increased stress are now likely to have low financial resilience. These consumers are more likely to fall behind on payments. Nearly 36% of respondents who already had low financial resilience and had a mortgage said they are likely to fall behind on mortgage payments; 36% of those with loans or credit cards are worried about repayments on these; and 42% of renters are worried about falling behind on rent payments. Almost a third of the adults (31%) saw a decrease in income, with households seeing income fall by a quarter, on an average. 

    FCA has been working with firms to ensure support is given to consumers who are in financial difficulty because of the pandemic. Support will be available both to those who have previously taken a payment deferral and those who are newly in financial difficulty, considering the specific needs of vulnerable consumers. Firms should work with customers to provide support before they miss payments. Given that people may be impacted in different ways, firms should be flexible and offer a full range of shorter and longer-term options, tailored to reflect customers’ individual circumstances. This could include:

    • Suspending, reducing, waiving, or cancelling any further interest or charges
    • Permitting the customer to make no or reduced payments
    • Agreeing on a repayment plan

    Tailored support is also available to overdraft customers who are struggling financially due to COVID. Firms should also treat customers fairly, for example, by not repossessing homes when customers are in lockdown and cannot access alternative accommodation. For consumers who have previously taken a payment deferral, firms should offer a range of options for repaying the missed payments. While these measures are designed to help during this difficult time, some may result in increased costs in the longer term. If a consumer can afford to continue making payments, it is in their best interests to do so. Firms are required to be clear about the credit file implications of any forms of support offered to borrowers.


    Related Links

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

    Related Articles
    News

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News
    News

    EP Reaches Agreement on Corporate Sustainability Reporting Directive

    The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).

    June 21, 2022 WebPage Regulatory News
    News

    PRA Consults on Model Risk Management Principles for Banks

    The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.

    June 21, 2022 WebPage Regulatory News
    News

    EC Regulation Amends Standards for Calculating Credit Risk Adjustments

    The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.

    June 21, 2022 WebPage Regulatory News
    News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News
    News

    EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance

    The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.

    June 17, 2022 WebPage Regulatory News
    News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News
    News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News
    News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News
    News

    BCBS Issues Climate Risk Principles while HKMA Expresses Its Support

    The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.

    June 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8280