This guidance applies in the exceptional circumstances arising out of the coronavirus pandemic (Covid-19) and its impact on the financial situation of consumer credit customers.
We have published proposals to enhance the support to consumer credit borrowers who face payment difficulties due to coronavirus.
We originally published guidance on consumer credit and coronavirus in April which was updated in July. We also published Additional guidance on consumer credit and coronavirus for firms on 30 September 2020. Our proposals comprise updates to these, together with certain rule disapplications. We have highlighted the key changes in the draft guidance documents.
How to respond
We want to act quickly to continue to protect consumers in these difficult times. We consider that the delay involved in publishing a formal consultation accompanied by a cost benefit analysis would be prejudicial to consumers’ interests. We are therefore not doing so. This is not a statutory consultation. There is no statutory requirement to prepare a cost benefit analysis for guidance.
We would welcome comments from stakeholders on this draft guidance by 10am on Friday 6 November 2020.
In particular, we would welcome views on:
- The scope of the proposals and the proposal not to enable consumers who have already benefitted from an initial payment deferral to be able to benefit from a further payment deferral if they have been able to resume payments since their initial payment deferral came to an end. Instead, we are proposing that they would benefit from the tailored support offered by firms under our additional guidance should they face payment difficulties due to coronavirus.
- The approach to repossessions in relation to motor finance and rent to own which is now set out in the updated additional guidance for firms.
- Our intention is to maintain the tailored support set out in the additional guidance on overdrafts published on 30 September. Tailored support could include reducing or waiving interest, agreeing a programme of staged reductions in the overdraft limit or transferring the overdraft debt to an alternative credit product on more favourable terms.
- Our intention to maintain our approach to premium finance so that consumers can continue to benefit from the tailored support we put in place on 30 October.
Please send your comments to: [email protected]