Context
The FCA wants firms to be clear on how their rules interact with The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium (England and Wales) Regulations 2020) and has issued Policy Statement PS21/1 accordingly.
Key points to note
What the FCA is changing
The FCA is making changes to the Consumer Credit sourcebook (CONC). This is to clarify how its rules apply where the Debt Respite Scheme Regulations also apply; and to avoid duplicating the effects of the Regulations in a disproportionate way. The FCA is not making changes to its rules or guidance in the Mortgages and Home Finance Conduct of Business (MCOB) or CONC 8 (Debt Advice).
Who this applies to
This policy statement is relevant to regulated firms which will need to comply with the Regulations and the FCA Handbook, in particular:
- consumer credit lenders
- debt collection agencies
It will be of interest to:
- mortgage lenders and administrators
- debt advice firms
- consumer groups with an interest in debt advice
- local authorities which give debt advice to consumers in England and Wales
Background to the Breathing Space Regulations
The Breathing Space Regulations will give people in problem debt the right to legal protections from creditor action for a defined period. The intention is to give them time to receive advice and potentially enter an appropriate scheme to resolve their debt.
The FCA does not have powers under the Regulations to supervise compliance or enforce them. However, systematic non-compliance with the Regulations is likely to be of concern to the Regulator.
If your firm is affected by the Regulations, you need to assess the need for any changes to your systems and processes and implement them as soon as possible ahead of the Regulations coming into force in May.
Next actions
For relevant firms to review and note as applicable, and to make any necessary amendments to policies and procedures.