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By Huw Jones
LONDON, July 31 (Reuters) - Britain's banks may need to
consider introducing "sustainable forbearance" for customers who
continue to face difficulties with loan repayments after
COVID-19 relief measures end in the autumn, the Financial
Conduct Authority (FCA) said on Friday.
The watchdog launched a "call for input" to determine what
further measures may be needed when repayment holidays
introduced after the pandemic lockdown for home loans and credit
cards come to an end on Oct. 31.
Banks have provided more than 1.8 million mortgage payment
deferrals and in excess of 1.6 million personal loan and credit
card payment holidays, the FCA said.
Though the FCA expects most borrowers to be able to resume
payments, it said that a significant minority will need further
support after many also borrowed from family and friends to keep
up payments on other loans.
"We consider that the appropriate time for firms to move
beyond blanket deferrals is at the end of the customer’s second
deferral," the FCA said.
Many borrowers will need a longer-lasting form of support,
which could include deferring payments of capital, interest,
fees and charges, it added.
"The responses to this call for input will inform our
assessment of what further guidance may be needed on how firms
should support customers that have already been provided
temporary support under our guidance," the FCA's statement said.
The call for input closes on Aug. 7. If responses show that
further measures are needed, the FCA said it would publish a
draft paper on mortgages in late August, followed by draft
guidance on consumer credit in mid-September.
(Reporting by Huw Jones
Editing by Rachel Armstrong and David Goodman)
