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FCA and government must work together on motor finance

FCA and government must work together on motor finance
The BVRLA has urged the Financial Conduct Authority to work with its colleagues in government to ensure all motor finance customers get the appropriate support during the COVID-19 crisis.  

The association has responded to the FCA’s draft guidance on motor finance, which said that leasing companies must offer a three-month payment freeze or another alternative which is in the best interests of the customer.  

Although it welcomes the flexibility offered within the guidance, the BVRLA has used its response to make the case for a closely coordinated approach from government and regulators that: 

Underwrites the full economic loss resulting from coronavirus forbearance 

Relaxes the constraints of meeting the Consumer Credit Act’s administrative requirements 

Ensures that bank covenants don’t prevent leasing companies from providing forbearance 

Delivers a clear message to consumers that a three-month payment deferral is not the automatic response to every forbearance request 

“Motor finance is a very different product to credit cards or mortgages, so we appreciate the time and consideration the FCA has given in developing a specific approach for our sector,” said BVRLA Chief Executive, Gerry Keaney.

“BVRLA members are united in wanting to support all their private and corporate customers, but they are being asked to provide unprecedented levels of forbearance that come with huge additional financial risks.

“The government needs to help all parts of the motor finance sector – bank-owned and independent – in dealing with the economic fallout of the Coronavirus outbreak. By doing this it can safeguard the funders that will deliver transport decarbonisation in the future.”

The BVRLA’s full response can be downloaded from the BVRLA website 

*Article Source http://www.bvrla.co.uk