PS21/1: Breathing Space Regulations: changes to our Handbook

Read PS21/1[1]

Why we are changing

We want firms to be clear on how our rules interact with The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium (England and Wales) Regulations 2020[2]). 

What we are changing

We are making changes to CONC Consumer Credit sourcebook[3] (CONC). This is to clarify how our rules apply where the Regulations also apply; and to avoid duplicating the effects of the Regulations in a disproportionate way.

We are not making changes to our rules or guidance in Mortgages and Home Finance Conduct of Business[4] (MCOB) or CONC 8 (Debt Advice).

Who this applies to

This policy statement is relevant to regulated firms who will need to comply with the Regulations and our Handbook, in particular:

• consumer credit lenders
• debt collection agencies

It will be of interest to:

• mortgage lenders and administrators
• debt advice firms
• consumer groups with an interest in debt advice
• local authorities that give debt advice to consumers in England and Wales

Background to the Breathing Space Regulations

The Breathing Space Regulations will give people in problem debt the right to legal protections from creditor action for a defined period. The intention is to give them time to receive advice and potentially enter an appropriate scheme to resolve their debt. 

We do not have powers under the Regulations to supervise compliance or enforce them. However, systematic non-compliance with the Regulations is likely to be of concern to us.

Next steps

If your firm is affected by the Regulations, you need to assess the need for any changes to your systems and processes and implement them as soon as possible ahead of the Regulations coming into force.