You can repossess cars but not homes during COVID, watchdog tells UK banks

By Huw Jones

LONDON, Jan 13 (Reuters) - British banks should avoid
repossessing homes of mortgage customers for another three
months but may repossess cars following the reimposition of
tough lockdown restrictions across the UK, the Financial Conduct
Authority proposed on Wednesday.

The FCA's no forced repossession guidance, introduced after
the first lockdown in March last year, had been due to expire at
the end of January.

The aim of the guidance is to ease pressure on customers who
are in difficulties due to a pandemic that tipped Britain into
its worst recession in 300 years.

"We propose extending this guidance so that firms should not
enforce repossessions before 1 April 2021," the watchdog said in
a statement.

A public consultation on the extension will end on Jan. 18.

"This approach takes account of the worsening coronavirus
situation and the government’s tighter coronavirus-related
restrictions, which mean that consumers could experience
significant harm if forced to move home at this time as a result
of repossession proceedings," the FCA said.

The watchdog also issued guidance last year to credit firms,
saying they should not terminate a contract or repossess goods
or cars, except in exceptional circumstances.

"We now propose changing this so that consumer credit firms
will be able to repossess goods and vehicles from 31 January
2021," the FCA said.

"However, this should only be as a last resort, and subject
to complying with relevant government public health guidelines
and regulations, for example on social distancing and
shielding."

Cars are sold by auto financing brokers as well as via bank
loans.
(Reporting by Huw Jones
Editing by Gareth Jones)