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Coronavirus: Loan and credit card payments set to be frozen | Coronavirus: Loan and credit card payments set to be frozen |
(32 minutes later) | |
People struggling with loan repayments and overdraft fees amid the coronavirus pandemic will be granted temporary relief under new proposals. | People struggling with loan repayments and overdraft fees amid the coronavirus pandemic will be granted temporary relief under new proposals. |
The Financial Conduct Authority is asking banks to freeze payments on loans and credit cards for up to three months for those facing difficulties. | The Financial Conduct Authority is asking banks to freeze payments on loans and credit cards for up to three months for those facing difficulties. |
The City watchdog also wants interest on the first £500 of existing overdrafts to be frozen for a period. | The City watchdog also wants interest on the first £500 of existing overdrafts to be frozen for a period. |
The FCA said the outbreak had caused an “unprecedented financial shock” | |
The watchdog is asking banks to respond to the proposed measures by Monday 6 April, and it wants them to come into force by Thursday 9 April. | |
After the FCA recently announced an "overhaul" for overdraft charges, many banks increased their charges and clustered around a similar figure of about 40%. | |
In its latest announcement, the watchdog said: "Over the next 90 days, firms would have to ensure all consumers are no worse off and not paying more than they would have under previous prices." | |
Other measures it has proposed include: | |
The FCA also said that consumers using any of these measures should not see their credit rating affected. | |
FCA interim chief executive Christopher Woolard said: "If confirmed, the package of measures we are proposing today will help provide affected consumers with the temporary financial support they need to help them weather the storm during this challenging time." |