The UK top financial market watchdog is proposing a three-month payment freeze among other measures designed to help people ride out the COVID-19 storm.
The Financial Conduct Authority (FCA) has proposed a range of targeted temporary measures designed as a stop-gap to quickly support users of certain consumer credit products who are facing a financial impact because of the exceptional circumstances arising from COVID-19.
Because of the immediate pressure these unprecedented circumstances is putting on the economy, the FCA is pushing for a much shorter consultation period than usual. Market stakeholders have until Monday April 6 to add their insights. If confirmed the measures would start to come into force by Thursday April 9 2020.
The proposals include 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.
The FCA also proposed that customers who have been hit financially by COVID-19 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.
The proposals would also 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.
The final proposal was that customers using these emergency measures will not see their credit rating affected by it.
“[The coronavirus] has caused an unprecedented financial shock with far-reaching consequences for consumers in every corner of the UK,” said Christopher Woolard, interim chief executive of the FCA. “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.”
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