Feds Issue Guidance to Financial Institutions Working with Customers Affected By COVID-19

March 25, 2020
SmithAmundsen Financial Services Alert

As the Coronavirus Disease 2019 (COVID-19) continues to impact our nation, financial institutions are finding themselves in a situation wherein their customers are unable to, or are at risk of being unable to, make timely loan payments. On March 22, 2020 the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), the Consumer Financial Protection Bureau (CFPB), and the State Banking Regulators (collectively, the “agencies”) issued an interagency statement to assist financial institutions in navigating the waters with customers affected by COVID-19.

Financial institutions are encouraged to work diligently with these customers by means of permitting short term (e.g., six months) insignificant modifications to loan terms, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment. Under these circumstances, the agencies state that:

Importantly, the interagency statement reassures financial institutions that the agencies or agency examiners: