Regulators urge banks and credit unions: Help your customers during the coronavirus emergency


Author photo

By

Personal Finance Reporter

Regulators are pushing for banks, credit unions and savings associations to provide consumers and small businesses with loans to help offset the financial burden caused by the coronavirus national emergency.

The Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency issued a joint letter encouraging banks and credit unions to offer small-dollar loans to their customers.

“Responsible small-dollar loans can play an important role in meeting customers’ credit needs because of temporary cash-flow imbalances, unexpected expenses, or income disruptions during periods of economic stress or disaster recoveries,” the agencies wrote in the letter.

Don’t miss: How to get help paying your mortgage, credit-card bills and student loans if you’re laid off due to the coronavirus pandemic

The letter comes after a record 3.28 million Americans applied for unemployment benefits last week as businesses shuttered in the wake of the coronavirus pandemic, laying off or furloughing millions of people.

The loans could include open-end lines of credit, closed-end installment loans or “appropriately structured” single payment loans.

“Loans should be offered in a manner that provides fair treatment of consumers, complies with applicable laws and regulations, and is consistent with safe and sound practices,” the agencies said.

The regulators also said that banks and credit unions should consider working with consumers and businesses who cannot repay loans as structured to find ways that they could pay back the principal without needing to borrow another loan.

Previously, this group of regulators had announced that they would count lending and retail banking activities targeted to help low- and moderate-income individuals, small businesses and small farms during the COVID-19 outbreak toward banks’ Community Reinvestment Act goals.

Other financial regulators have also taken steps to help consumers during the coronavirus outbreak. The Federal Housing Finance Agency, for instance, ordered Fannie Mae

FNMA, +4.69%

 and Freddie Mac

FMCC, +4.64%

to instruct mortgage servicers to provide 12 months of forbearance on home loans to borrowers who have encountered financial difficulty as a result of the national emergency.

Read more: Equifax says it will work with lenders, creditors to help reduce the impact of the coronavirus crisis on U.S. credit reports

What's your reaction?
Happy0
Lol0
Wow0
Wtf0
Sad0
Angry0
Rip0
Leave a Comment

escort eskişehir escort samsun escort gebze escort sakarya escort edirne