Recent regulatory developments of interest to financial institutions with focus on consumer finance.

Contents

• Draft Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020
• COVID-19: FCA final updated temporary guidance on support for motor finance and high-cost credit customers
• Mortgage intermediaries list for use by mortgage prisoners

Draft Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020

A draft version of the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 have been published, together with a draft explanatory memorandum.

The Regulations, which have been laid before Parliament, establish the first part of a debt respite scheme for individuals in problem debt. This gives eligible people in problem debt, who receive professional debt advice, access to a 60-day period in which interest, fees and charges are frozen and enforcement action is paused. This moratorium period is commonly known as "breathing space". For individuals receiving mental health crisis treatment, the Regulations establish an alternate route by which the protections of a moratorium may be accessed, and ensure that the protections are in place for the duration of their crisis treatment.

With the exception of the provisions referred to in regulation 1(3) to (7), the Regulations come into force on 4 May 2021. Various parts of the Regulations have retrospective effect.

Guidance will be prepared in due course to assist creditors, creditor agents, and debt advice providers as they apply the Regulations.

COVID-19: FCA final updated temporary guidance on support for motor finance and high-cost credit customers

On 15 July 2020, the UK Financial Conduct Authority (FCA) finalised its updated temporary guidance to support consumers facing payment difficulties due to COVID-19 in relation to motor finance, buy-now pay-later (BNPL), rent-to-own (RTO), pawnbroking and high-cost short-term credit (HCSTC) products:

• Motor finance agreements and coronavirus: updated temporary guidance for firms;
• High-cost short-term credit agreements and coronavirus: updated temporary guidance for firms; and
• Rent-to-own, buy-now pay-later and pawnbroking agreements and coronavirus: updated temporary guidance for firms.

Read more in our separate briefing: COVID-19: FCA final updated temporary relief measures for motor finance and HCSTC agreements.

The FCA has also published a feedback statement, FS20/11, on responses to its consultation on the updated guidance and the COVID-19 Motor Finance and High Cost Credit Instrument 2020 (FCA 2020/31), which makes consequential amendments to rules in the Consumer Credit sourcebook (CONC).

The updated temporary guidance and rules entered into force on 17 July 2020.

Mortgage intermediaries list for use by mortgage prisoners

The FCA has published a press release stating that it wants to hear from mortgage intermediaries that are willing to work with mortgage prisoners to help them identify and move to an active lender, or signpost them to additional support such as debt advice. Interested intermediaries will be included on a list that will be shared with customers (through the Money Advice Service website) and lenders.

Details of the qualifying criteria and how to submit an expression of interest are on the webpage. The deadline is 6 August 2020, although there is provision to apply after this date.

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