Pandemic support for borrowers could remain
Support for struggling borrowers that were put in place during the coronavirus pandemic could be made permanent, under proposals by City regulator's proposals.
The rules and guidance apply to mortgages, overdrafts and other forms of consumer credit and require lenders to give the right support to customers struggling to make repayments – including making reduced or no payments temporarily or changing the mortgage or loan term.
Firms should also ensure that repayment arrangements are appropriate and signpost customers to free, impartial money guidance and debt advice.
The Financial Conduct Authority( F CA) says firms should offer appropriate support to all customers experiencingfinancial difficulty and has launched an industry-wide consultation on the issue, adding “Our proposals build on and enhance our expectations of firms to deliver good outcomes for customers in financial difficulty."
The consultation is open until July and the FCA says it expects new rules to come into force in the first half of 2024. The FCA has worked with nearly 100 lenders on how they treat borrowers in financial difficulty and has sought significant improvements from many of them.
Sheldon Mills, executive director of consumers and competition at the F CA, said :" Many firms have been following our temporary guidance, developed during the pandemic, to support borrowers in tough times.
"Our proposals today will help ensure this continues.”
He added: 'Where we see firms not providing the right support, we will act quickly to put this right. Firms are already paying up to £47 min compensationfor not providing appropriate support to borrowers .”