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

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News
    News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8596