As coronavirus accommodations end, government urges banks to help borrowers
With some policies expiring, a handful of agencies are asking banks to be flexible, when appropriate
The government is urging financial institutions to work with businesses and consumers who have been adversely affected by the coronavirus pandemic as some borrower accommodations expire.
Some borrowers may still find themselves under financial stress, the Federal Reserve, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau and the Federal Deposit Insurance Corporation said in a statement on Monday.
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“As initial loan accommodation periods come to an end, some borrowers may be able to resume contractual payments, and others may be unable to meet their obligations due to continuing financial challenges,” the agencies said in a statement. “The agencies encourage financial institutions to consider, when appropriate, prudent options for additional accommodations that can ease cash flow pressures on affected borrowers, improve their capacity to service debt, and facilitate the financial institution’s prudent management of its loans, consistent with applicable laws and regulations."
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While lawmakers debate the terms of another possible relief package, some provisions stipulated under the CARES Act have begun to expire.
In addition to expanded unemployment benefits, a federal moratorium on evictions has also run its course. Foreclosure protection for homeowners with federally-backed mortgage loans will expire at the end of August.
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Meanwhile, many parts of the U.S. are still dealing with rising cases of the virus, which has put tiered reopening plans on pause in some states, and caused other governors to scale their plans back.
The HEALS Act, which Senate Republicans unveiled last week, includes a number of provisions to help households and businesses weather the pandemic, including another round of direct cash payments, asecond round of Paycheck Protection Plan loans, enhanced unemployment benefits and a number of tax breaks.