UK regulator the Financial Conduct Authority is seeking rapid feedback on a series of proposed measures for lenders to help consumers of some credit products amid the current health and economic crisis. The measures relate to overdrafts, credit and store cards and catalogue credit, and personal loans.
The deadline for responses to the consultation is 6 April at 9am BST. The measures, if confirmed, would start to come into force by 9 April and would provide a short-term, temporary stop-gap, for a period of up to three months.
The package is intended to complement measures already announced by the government to support mortgage holders (and renters) and the assistance being provided for furloughed employees and the self-employed.
The FCA’s proposals include:
- Expectations on firms to offer a temporary payment freeze on loans and credit cards where consumers face difficulties with their finances as a result of the coronavirus, for up to three months.
- Ensuring that for customers who have been hit financially by the coronavirus and already have an arranged overdraft on their main personal current account, up to £500, will be charged at zero interest for up to three months.
- Requiring firms to make sure that all overdraft customers are no worse off on price when compared to the prices they were charged before the recent overdraft changes came into force.
- Ensuring consumers should not have their credit rating affected as a result of using any of these temporary measures.
For more news and reporting on the coronavirus and how management accountants can handle challenges related to the outbreak, visit FM’s coronavirus resources page.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.