FCA issues Policy Statement on HMG’s Breathing Space Regulations

The FCA has provided details on how it is responding to the introduction of regulations intended to tackle problem debt, due to come into force in May, by making a number of changes to its Handbook.

Policy Statement PS21/1 is intended to help firms understand clearly how FCA rules interact with The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium (England and Wales) Regulations 2020), aka the Breathing Space Regulations.

The FCA is making changes to its Consumer Credit sourcebook (CONC). These are intended to clarify how FCA rules apply in instances where the Regulations also apply, and to avoid disproportionate duplication. It is not making any changes to its rules or guidance in Mortgages and Home Finance Conduct of Business (MCOB) or CONC 8 (Debt Advice) sourcebooks.

Policy Statement PS21/1 is particularly relevant to consumer credit lenders and debt collection agencies, but also to other firms, including mortgage lenders and administrators, debt advice firms, consumer groups with an interest in providing debt advice, and local authorities who provide debt advice to consumers in England and Wales.

The Breathing Space Regulations provide certain time-limited legal protections against creditor action to those affected by problem debt, to enable them to seek and receive advice on entering into an appropriate scheme that will help them resolve their debt.

The FCA has no power to supervise firms’ compliance with the Regulations or to enforce them, but has said that non-compliance with the Regulations is ‘likely to be of concern to us’.

If your firm is affected by the Regulations, it’s important you carefully assess whether any changes to your systems and processes are required and implement these well before the Regulations come into force in May.

For further details on this or any compliance-related matter, call a member of our expert team on 01925 767888, or email helpline@ukgigroup.com.

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