The U.K. Financial Conduct Authority has published two consultations on its draft guidance for firms on mortgages and safeguarding customers’ funds during the COVID-19 pandemic.
The first consultation relates to the FCA’s proposed guidance on how mortgage lenders should treat customers coming to the end of a payment holiday or those yet to request one. The timeframe for customers who have not yet benefited from a payment holiday to apply for one will be extended to October 31, 2020. The current ban on house repossessions will also be extended to October 31, 2020. For customers who have reached the end of their mortgage payment holidays, the FCA’s proposed guidance states:
Comments on the proposed guidance for mortgage lenders are sought by May 26, 2020.
The second consultation relates to additional temporary guidance for payments firms (including payments and e-money institutions) to strengthen how they look after customers’ money. A consultation on approaches adopted by payment firms was due to commence later in the year, but has been brought forward due to the financial pressures COVID-19 is placing on some payments firms. The guidance offers directions for how firms should meet their safeguarding requirements for customers’ funds and the wind-down plans they should have in place to manage their liquidity and resolution risks.
Comments on the proposed guidance for payments firms are sought by June 5, 2020. The FCA plans to publish a letter to CEOs of payment services providers at the end of the consultation, and will conduct a full consultation on changes to the FCA’s existing payment services approach document later in the year. The FCA anticipates that the temporary guidance on which it is consulting will ultimately be incorporated into its approach documents.
View the FCA's consultation on guidance for mortgage lenders.
View the FCA's consultation on guidance for payments firms.
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