If you haven’t already heard on the national news, the Financial Conduct Authority (FCA) has today (Thursday) proposed a range of measures designed as a stop-gap to support those with credit cards or loans and overdrafts facing a financial impact because of the exceptional circumstances arising from Coronavirus.
The package is intended to complement measures already announced by the government to support mortgage holders (and renters) and the assistance being provided for furloughed employees and the self-employed.
If confirmed, the measures would start to come into force by Thursday 9 April 2020.
The plans
The FCA have proposed the following:
- Set out the FCA’s expectations on firms to offer a temporary payment freeze on loans and credit cards where consumers face difficulties with their finances as a result of coronavirus, for up to three months.
- Ensure that for customers who have been hit financially by the coronavirus and already have an arranged overdraft on their main personal current account, up to £500 will be charged at zero interest for up to three months.
- Require firms to make sure that all overdraft customers are no worse off on price when compared to the prices they were charged before the recent overdraft changes came into force.
- Ensure consumers using any of these temporary measures should not have their credit rating affected because of this.
Woolard: Unprecedented financial shock
Christopher Woolard, Interim Chief Executive of the FCA, said:
“Coronavirus has caused an unprecedented financial shock with far-reaching consequences for consumers in every corner of the UK.
“If confirmed, this package of measures we are proposing today will help provide affected consumers with the temporary financial support they need to help them weather the storm during this challenging time.”
Short-term, temporary stop-gap
If confirmed, these measures will provide a short-term, temporary stop-gap, for a period of up to three months. These measures would provide an expected minimum level of financial support for consumers who until now have been financially stable.
They are not a substitute for FCA’s normal forbearance where that would be more suitable for a consumer in serious and immediate financial difficulty.
Where consumers can still afford to make payments, they should as normal and this is likely to be in their best long-term interest to continue to do so.
For more information visit the FCA Website.
