The Financial Conduct Authority (FCA) has said guidance on payment deferrals for personal loan borrowers is expected to expire at the end of October but is being kept under review.
Struggling consumer credit borrowers have been allowed to request three-month payment deferrals since July under FCA guidance that is due to end on 31 October.
Updated draft guidance from the City watchdog said borrowers can still apply for the support until the end of October, meaning some deferrals could last until the end of January 2021, but added that the rules on granting payment breaks are still expected to end next month.
“We expect the July guidance to expire on 31 October but we will keep this under review depending on how the wider situation develops,” the FCA said.
The FCA is now consulting on draft guidance to replace the current forbearance rules.
The guidance urges firms to treat customers fairly and ensure payment arrangements are affordable.
It also suggests suspending, reducing, waiving or cancelling any interest, fees or charges for missed payments.
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The regulator added that it should be made clear that any arrears under the new guidance after October would show on credit files, which it doesn’t under the current payment deferrals rules.
“Our proposals are designed to help people who have been facing payment difficulties because of the pandemic get back on track with tailored support from firms,” Christopher Woolard, interim chief executive at the FCA, said.
“For those who can restart payments, it is in their best interests to do so.”