The Financial Conduct Authority (FCA) has proposed a series of new loan extensions and payment deferrals for consumers who have been financially affected by the coronavirus pandemic.
The City watchdog has told bank lenders and non-bank lenders to be ready to offer more leniency to consumer credit borrowers who have taken out personal loans, credit cards, motor finance, rent to own, buy-now pay-later, pawnbroking and high-cost short-term credit.
Consumer credit customers should be offered a payment deferral of up to six months, the FCA said, even if they had a previous deferral offered to them under the regulator’s July guidelines.
Meanwhile, high-cost short-term credit consumers should be able to apply for a one month payment deferral, if they haven’t already had one.
“We will work with trade bodies and lenders on how to implement these proposals as quickly as possible, and will make another announcement shortly,” said an FCA spokesperson.
“In the meantime, consumer credit customers should not contact their lender just yet. Lenders will provide information soon on what this means for their customers and how to apply for this support if our proposals are confirmed.
“Consumer credit customers who have already benefitted from payment deferrals and are still experiencing payment difficulties should speak to their lender to agree tailored support.
“It may also be in the interests of consumer credit customers who expect to have long-term financial difficulties to agree other forms of tailored support with their lender.”