Consumer finance regulatory news, 15 March 2021

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• COVID-19: FCA consults on revisions to mortgages tailored support guidance

COVID-19: FCA consults on revisions to mortgages tailored support guidance

On 5 March 2021, the UK Financial Conduct Authority (FCA) published a short consultation (which ended on 10 March 2021) on a revised version of its tailored support guidance for mortgage firms. The guidance supplements the FCA's payment deferral guidance (PDG) and applies to firms dealing with customers experiencing payment difficulties due to circumstances arising out of the COVID-19 pandemic when they are not receiving support under the PDG.

The guidance, which was last updated in January 2021, specifies that firms should not enforce mortgage repossessions, except in exceptional circumstances, before 1 April 2021. This means that from 1 April, firms can enforce repossessions, but only if they act in accordance with FCA guidance and regulatory requirements. Repossession should only take place as a last resort if all other reasonable attempts to resolve the position have failed. Firms will also need to comply with any relevant legislative requirements which may prevent firms from enforcing repossession in certain parts of the UK.

The FCA recognises that repossessions can be difficult and stressful for customers but delaying repossession can lead to poor customer outcomes as a result of increased balances and equity erosion. Therefore, it proposes to allow firms to repossess homes when it is fair and reasonable to do so.

In a separate statement, the FCA highlights that the deadline for applications for new payment deferrals under the PDG is 31 March 2021.

The FCA also states that it will publish the findings of its initial supervisory work monitoring firms' implementation of its temporary guidance by the end of March.

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Authored by Yvonne Clapham