Regulators ask banks to ‘work constructively’ with borrowers affected by coronavirus

by Ryan Smith11 Mar 2020

Federal regulators are urging financial institutions to “work constructively” with borrowers affected by the coronavirus outbreak.

In a joint statement, six regulatory bodies – the Federal Reserve, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Conference of State Bank Supervisors – urged financial institutions to help customers in areas affected by the outbreak.

“The agencies recognize the potential impact of the coronavirus on the customers, members, and operations of many financial institutions and will provide appropriate regulatory assistance to affected institutions subject to their supervision,” the agencies said.

The regulators said that they would stand behind any reasonable measures financial institutions took to help affected borrowers.

“Prudent efforts that are consistent with safe and sound lending practices should not be subject to examiner criticism,” they said.

The regulators did not specify what measures they expected banks to take – although in the wake of many natural disasters like hurricanes and earthquakes, many lenders offer a period of forbearance to allow borrowers more time to make payments.

Other countries are also making financial allowances for the outbreak.  Italy, which has instituted travel restrictions and a nationwide ban on public gatherings to combat the coronavirus outbreak, has announced that mortgage payments will be suspended across the country, according to a BBC report.