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COVID-19: FCA updates mortgage and consumer credit repossessions guidance
On 27 January 2021, the UK Financial Conduct Authority (FCA) published a statement giving an update on mortgages, consumer credit, banking and payments during coronavirus. Among other things, the FCA confirms its updated Finalised Guidance: tailored support guidance for Mortgages and coronavirus: updated Tailored Support Guidance for firms and Consumer Credit and coronavirus: updated Tailored Support Guidance for firms.
For mortgages, the FCA has extended its guidance so that firms should not enforce repossessions, except in exceptional circumstances, before 1 April 2021.
For consumer credit, it updates the guidance so that firms will be able to repossess goods and vehicles from 31 January 2021. The final guidance emphasises that this should only be as a last resort, and is subject to complying with relevant government public health guidelines and regulations, for example on social distancing and shielding. Importantly, firms will also need to consider the potential wider impact on vulnerable customers, including because of the pandemic, when deciding whether repossession of goods or vehicles is appropriate.
The updated guidance comes into force on 29 January 2021. The FCA summarises the feedback received and its response in a feedback statement, FS21/2.
In the light of the ongoing uncertainties arising from the impact of COVID-19, the FCA will keep the guidance under regular review and will update or amend it, or provide new guidance, if it is required.
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Authored by Yvonne Clapham
