UK regulator tells banks to support customers

Bloomberg

The Financial Conduct Authority (FCA) told more than 3,500 lenders they need to provide customers in vulnerable circumstances with more support as the rising cost of living threatens to tip millions into financial difficulty.
The UK regulator said on Thursday that it was concerned consumers aren’t getting the support they need across the sector. “Changing pressures on consumers” means banks should look to provide “tailored forbearance and debt help to those in financial difficulty,” similar to measures recommended during the pandemic, it said.
The FCA said it would use its supervisory and enforcement powers to take further action as necessary. The guidance extends to buy-now, pay-later firms even though not all of them are regulated.
The lenders were reminded by the FCA to give borrowers in financial difficulty appropriate tailored forbearance that is in their interests and takes
account of their individual
circumstances.
The FCA told banks to support borrowers who show signs of financial difficulty or struggle with debt, by making them aware of and helping them access money guidance or free debt advice and ensure that any fees and charges levied on borrowers in financial difficulty are fair and just cover costs.
The regulator also told lenders to make sure the approach to taking on new borrowers takes account of the financial pressure they may be facing and the impact on their expenditure.
Moody’s Investors Service Ltd. said earlier this month that almost 13% of British mortgage borrowers could face financial distress if the UK sees high-single-digit inflation next year, alongside an aggressive rise in interest rates.