Lots more news from the FCA this week.
Coronavirus regulatory news
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Motor finance agreements and coronavirus: draft temporary guidance for firms FCA: 3 month payment break, interest continues to accrue, broadly same as unsecured loans but with extra provisions about repossessions, balloon payments, insurance complications if term extended etc.
Rent-to-own, buy-now pay-later and pawnbroking agreements and coronavirus: draft temporary guidance for firms FCA: 3 month deferrals (RTO)/ extension of promotion period (BNPL) / extension of redemption period (pawn).
High-cost short-term credit and coronavirus: draft temporary guidance for firms FCA: only 1 month break but interest is frozen.
COVID-19: Individual Voluntary Arrangement (IVA) protocol guidance Insolvency Service: a range of extra provisions including“they may be allowed to reduce payments by up to 25% and to take payment holidays for up to 3 months without a variation being required and in addition to any pre-existing terms already contained in the protocol.”
Articles on the FCA’s payment breaks:
- UK lenders to grant 1.2m mortgage deferments Guardian: A payment holiday may make a borrower less desirable in their eyes, and that means that in some cases, people’s future borrowing could be impacted.
- Coronavirus: Freeze on pawn, payday and car loan payments BBC.
- Coronavirus & payday loans – 1 month break with no interest my article.
- BrightHouse and other rent-to-own firms must give customers three month payment break and items will not be repossessed Sun.
- 3 month car finance payment breaks because of Coronavirus my article.
- UK car finance groups report surge in motorists seeking loan relief FT (paywall) Rise in calls to lenders prompts fears over potential wave of defaults
- Millions leaving payment holiday requests too late and could ruin credit scores Sun: millions of people are yet to contact their creditors – despite having already missed a payment, or worrying that they’ll slip into the red.
I’m in the middle of applying for a mortgage but my employer has put me on furlough – will this affect my application? Mail: if you’re in this situation, it’s likely your lender will reassess your application based on your current furlough income.
Benefits & other news
Renters’ unions are calling on the government to suspend rents for the duration of the coronavirus crisis, as research suggests millions are having to choose between paying landlords and putting food on the table, or have already been made homeless.https://t.co/xCuIJUGESy
— Turn2us (@turn2us_org) April 16, 2020
MIND THE GAPS – Reporting on Families’ incomes during the Pandemic CPAG highlights groups where claiming benefits is impossible or hard.
UK car insurers urged to refund claims windfall Evening Standard: Car insurance companies have seen accident claims fall by up to 60% in some cases as traffic vanishes from the road thanks to lockdown measures.
Fear of jump in problem gambling prompts backlash against industry FT (paywall) Lockdown fuels rise in the popularity of more addictive betting options.
Almost 13m UK households ‘owed £1.7bn by energy supplier’ Energy News: a tenth of billpayers are owed a rebate of more than £200.
Met police lose two thirds of finance officers as fraud soars Times (paywall) The Metropolitan Police employed 91 financial officers in 2007-08 but that number had fallen to only 30 by February this year.
Robots, it appears, have taken over the NatWest asylum – it’s the banking equivalent of R2-D2 on steroids Mail: difficulties after a bereavement, accounts closed with no explanations.