The FCA published Policy Statement 21/1 Breathing Space Regulations – changes to our Handbook on 26th February 2021. PS21/1 confirms the changes that will be made to the CONC sourcebook as a result of The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium (England and Wales) Regulations 2020) (‘the Breathing Space Regulations’) which will be coming into force on 4th May 2021.
The salient points of consideration to note about the Breathing Space Regulations is that:
- It will give debtors legal protection from collection and enforcement action for 60 days after being advised and assessed by an eligible FCA authorised debt advice firm or a local authority that they are eligible for a 60-day moratorium under the Breathing Space Regulations.
- It will give debtors receiving mental health treatment extended legal protection from collection and enforcement action after being certified by an Approved Mental Health Professional and confirmed as eligible by an eligible FCA authorised debt advice firm. It is to be noted that there is no 60-day limit to a mental health crisis moratorium period.
- Lenders cannot apply interests and/or other charges during the moratorium period.
It is recommended that lender review and update your arrears and forbearance processes to enable compliance with the Breathing Space Regulations. Consequently, it is recommended that you update your documented arrears and forbearance policies and procedures to align with your revised processes and that you provide relevant staff with awareness training pertaining to the Breathing Space moratorium.