The FSC issued a letter to banks on February 18, 2020 asking that persons who have repayment difficulties due to the epidemic be allowed to defer or reschedule payments for 3 to 6 months on personal financial products, including mortgages, car loans, consumer loans, and credit card payments. The deferral period will expire at the end of July 2020, but some persons will continue to need assistance due to the impact of the epidemic on their personal finances. Accordingly, on May 12, 2020 the FSC coordinated the extension of debt workouts for credit card debts and other personal loans until the end of December 2020.

 

On May 12, 2020, the FSC invited the Bankers Association and banks to discuss the matter, and they reached the following conclusions:

1. Deferral period: The deferral period was extended from the end of July 2020 to the end of December 2020. People who have repayment difficulties due to the epidemic can apply to the bank for deferral or rescheduling of payments for 3 to 6 months.

2. Application for deferral of payments for financial products: Personal financial products include mortgages, car loans, consumer loans, credit card payments, etc. Those experiencing payment difficulties may apply for deferral of credit card debts for 3 to 6 months, and the liquidated damages and recurring interest will be exempted during the deferral period. For principal or interest of other personal loans, the debtor may apply for a deferral of 3 to 6 months, and the liquidated damages and default interest will be waived during the extension period.

3. Qualified applicants: Considering the wide-ranging impact of the epidemic, the relief mechanism of the banking industry should support customers in so far as it can. When accepting customers'' application for personal debt workout proceedings, banks are required to reasonably consider the situation of customers affected by the epidemic, and eligibility should not be limited to medical personnel or those who are home-isolated or home-quarantined. In addition, banks have been asked to revise their website content to reflect the sorts of applications received and how the applications have been handled.

4. Use of credit cards during debt workout proceedings: When a cardholder applies for a personal debt workout, it is inappropriate to impose across-the-board restrictions on the cardholder''s right to use their credit card during the proceedings. Instead, banks should take into account the customer''s needs, ensure proper risk control, and fully consider circumstances where the cardholder''s continued use of the credit card might be necessary. For example, if a credit card is used for automatic payment of such necessities as water and electricity bills, use of the credit card must be maintained.

5. Personal credit records will not be affected during the deferral period.

 

When a member of the public is affected by the epidemic and is experiencing repayment difficulty as a result, they can apply to their bank before the end of December 2020 for deferral of payments. If a person who has applied for deferral continues to be affected by the epidemic, they can apply again to the bank within the above period. The FSC hopes that banks will help customers to weather the epidemic and manage their debt. Customers, for their part, should appreciate the value of a clean credit record.