FCA is consulting on proposed guidance on guarantor loans. It had previously consulted in February, but its proposals were not popular. It now addresses what it considered is, respectively, enforcing and not enforcing guarantees under the CCA. In particular, it considers that where a CPA or direct debit is exercised without prior notification, this is sufficiently coercive as to constitute enforcement of the security for the purposes of s87 CCA. Where there is pre-notification, FCA says this is not sufficiently coercive provided the guarantor has a reasonable opportunity to act if he or she wishes to avoid payment being taken. The guidance sets out FCA’s expectations on lenders, and sets out the three options it considers lenders have when they wish to enforce under guarantor loans. It asks for comments by 25 November.
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