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

    PRA to Elaborate on Approach to Transposition of CRD5 by Mid-December

    PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.

    November 30, 2020 WebPage Regulatory News
    News

    SRB Sets Out Work Program for 2021-2023

    SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.

    November 30, 2020 WebPage Regulatory News
    News

    EIOPA Consults on KPIs on Sustainability for Non-Financial Reporting

    EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.

    November 30, 2020 WebPage Regulatory News
    News

    HM Treasury Extends Consultation Dates for FRF and Solvency II Reviews

    HM Treasury extended the consultation period on Phase II of the Future Regulatory Framework (FRF) Review, from January 19, 2021 to February 19, 2021.

    November 30, 2020 WebPage Regulatory News
    News

    GHOS Endorses Coordinated Approach to Mitigate COVID Risks for Banks

    The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS, endorsed a coordinated approach to mitigate COVID-19 risks to the global banking system.

    November 30, 2020 WebPage Regulatory News
    News

    US Agencies Issue Statement on LIBOR Transition

    US Agencies (FDIC, FED, and OCC) issued a joint statement encouraging banks to cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021, to facilitate an orderly LIBOR transition.

    November 30, 2020 WebPage Regulatory News
    News

    ECB Publishes Guide on Management of Climate and Environmental Risks

    ECB finalized guidance on the way it expects banks to prudently manage and transparently disclose climate and other environmental risks under the current prudential rules.

    November 27, 2020 WebPage Regulatory News
    News

    BCBS Amends Capital Treatment of Non-Performing Loan Securitizations

    BCBS published a technical amendment to the capital treatment of securitizations of non-performing loans by banks.

    November 26, 2020 WebPage Regulatory News
    News

    PRA Policy on Stressed VaR and RNIV Calculations Under Market Risk

    PRA published the policy statement PS23/20 on the calculation of stressed value at risk (sVAR) and risks not in value at risk (RNIV) under the market risk framework.

    November 26, 2020 WebPage Regulatory News
    News

    BoE to Move Statistical Data Collection to BEEDs Portal

    BoE announced that the Data and Statistics Division is planning to move collection of statistical data to the BoE Electronic Data Submission (BEEDS) portal.

    November 25, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6179