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(Adds industry reaction)
By Huw Jones
LONDON, April 9 (Reuters) - The Financial Conduct Authority
said on Thursday it would add car financing to the temporary
relief measures aimed at supporting households facing sudden
financial hardship as result of the coronavirus epidemic.
The FCA's move is an instruction to banks under which they
must offer freezes to all customers that want one.
As expected, the FCA also confirmed proposals set out last
week requiring banks to offer three-month payment freezes on
loans and credit card debt.
"We know there is still more work to be done, and we will be
announcing further measures to support consumers in other parts
of the credit market in the future, including in the motor
finance sector next week," FCA Interim Chief Executive
Christopher Woolard said in a statement.
"Customers should think carefully before making use of these
measures and only do so if they need immediate help. Where they
can still afford to make payments, they should continue to do
so," Woolard said.
The full range of measures will apply by April 14 to allow
banks time to ensure they have enough resources in place to
handle customer requests, the FCA said.
Banks have already been inundated with calls from worried
customers as the number of people forced to claim welfare in a
largely shuttered economy rocket.
UK Finance, which represents banks that will apply the
measures, urged consumers to use online chat, social media and
mobile and banking apps where possible to obtain information
about the relief.
"If customers do need to speak to their lender, we ask
customers to be considerate of those most in need of immediate
relief to ensure phone lines are available for this group and if
possible consider waiting until after the Easter weekend to
contact their lender," UK Finance said.
In response to the consultation, the FCA clarified that
guarantor loans, logbook loans, home collected credit, a loan
issued by Community Development Finance Institution, and some
loans issued by regulated credit unions also come under the
temporary relief measures.
"All firms will be ready to receive customer requests by 14
April, although some firms including the major banks and
building societies, will be adopting the changes today," the
watchdog said.
The measures will allow customers hit by coronavirus and who
already have an arranged overdraft on their main personal
current account, to have up to 500 pounds charged at zero
interest for three months.
The FCA said that consumers using any of the temporary
payment freezes will not have their personal credit rating
affected.
(Reporting by Huw Jones, editing by Sinead Cruise and Angus
MacSwan)
