Senior member of the Senate Banking Committee Sen. Bob Menendez banded together with committee colleagues to urge regulators and trade groups prepare for the impact of coronavirus in the financial sector.
Letter to Financial Regulators
The first letter, sent to leaders of the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration, Office of the Comptroller of the Currency, Consumer Financial Protection Bureau, Federal Housing Finance Agency and Conference of State Bank Supervisors, urged the organizations develop contingency plans to protect consumers who may suffer financially as a result of the disease.
The letter posited that Americans that complied with CDC guidance and in the interest of protecting the well-being of their families were at risk of negative shocks to their household finances. The institutions were urged to issue guidance to financial institutions guiding them to work with both consumers and businesses affected by the virus.
The senators encouraged institutions to modify existing loans; extend new consumer-friendly access to credit; and maintain safe-and-sound lending practices.
“The guidance should also encourage financial institutions to take steps to prevent adverse information from being reported to the credit bureaus and utilized in any manner that harms consumers affected by the virus,” wrote Sen. Menendez, along with Sens. Mark Warner (D-Va.), Sherrod Brown (D-Ohio), Elizabeth Warren (D-Mass.), Brian Schatz (D-Hawaii), Chris Van Hollen (D-Md.), Catherine Cortez Masto (D-Nev.) and Doug Jones (D-Ala.).
Letter to Trade Groups
The second letter, sent to the Consumer Bankers Association, Bank Policy Institute, American Bankers Association, Financial Services Forum, Credit Union National Association, National Association of Federally-Insured Credit Unions, and the Independent Community Bankers of America, urged similar steps.
Sen. Menendez, who signed the letter with Sens. Warner, Warren, Schatz, Van Hollen, Cortez Masto, Jones and Jack Reed (D-R.I.), want the trade associations to prioritize employee health and safety in the event of a coronavirus outbreak.
Additionally, it wants the associations to work with members to ensure flexibility and forbearance to customers who are impacted negatively as a result of following CDC recommendations to limit both exposure to and spread of the virus.
The letter urged steps including preservation of employment status, financial forbearance and seeks protections against financial penalties incurred due to following CDC guidance.
“Many of your customers may face shocks to household finances, including challenges with paying their day-to-day bills, credit cards, small business loans and mortgage payments, among other financial obligations,” the senators stated. “Accordingly, we urge you to consider waiving overdraft and monthly service fees for affected customers, suspending or modifying student loan, mortgage and business loan payments as necessary, providing affordable, short-term credit, and encouraging customers to contact your institution’s special care line so that you may work with them individually to help them avoid the negative consequences of this unique health emergency.”