Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what assessment (a) his Department and (b) the Financial Conduct Authority has made of the effect that the GC16/2 proposal, published in February 2016, to require lenders to issue default notices before collecting from guarantors would have on (i) the number of borrower defaults subsequently reported to the Credit Reference Agencies, (ii) borrowers' credit scores and (iii) levels of financial exclusion.

These are matters for the Financial Conduct Authority (FCA) and relate to FCA Guidance Consultation (GC16/2) issued on the interpretation of provisions in the Consumer Credit Act 1974, regarding whether a default notice should be given to a guarantor before payment is taken from them when a borrower defaults. The FCA is currently considering responses to the consultation and will publish a response after considering the complex issues raised.