FCA Proposes Guidance on Mortgage and Consumer Credit Repossessions
FCA proposed two sets of guidance on the approaches to mortgage repossessions and consumer credit repossessions, with comment period ending on January 18, 2021. The existing guidance on mortgage repossessions, which was published in November 2020, specified that firms should not enforce repossessions before January 31, 2021, except in exceptional circumstances. FCA is now proposing to extend this enforcement date for mortgage repossessions to April 01, 2021. This approach considers the worsening COVID-19 situation and the tighter COVID-related restrictions of the government.
Additionally, the existing consumer credit guidance, which was published in November 2020, sets out that, before January 31, 2021, firms should not terminate a regulated agreement or repossess goods or vehicles under the agreement that the customer needs, except in exceptional circumstances. FCA is now proposing to change this so that consumer credit firms will be able to repossess goods and vehicles from January 31, 2021. However, this should only be as a last resort and subject to complying with relevant government public health guidelines and regulations. Importantly, firms will also be expected to consider the impact on customers who may be vulnerable, including because of the pandemic, when deciding whether repossession of goods or vehicles is appropriate.
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Comment Due Date: January 18, 2021
Keywords: Europe, UK, Banking, COVID-19, Consumer Credit, Credit Risk, Residential Mortgage, FCA
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