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New York regulator issues guidance urging financial institutions and mortgage servicers to work with borrowers
On March 19, the New York Department of Financial Services issued guidance urging its regulated institutions to work with members and communities affected by Covid-19. Efforts include, among other things, waiving fees, providing new loans on favorable terms, increasing ATM cash withdrawal limits, waiving early withdrawal penalties on time deposits, increasing credit card limits, and offering payment accommodations to assist borrowers having payment difficulty.
The issuance followed a similar guidance aimed at regulated and exempt mortgage servicers to work with borrowers adversely impacted by Covid-19. Among other things, servicers should consider (i) forbearing payments for 90 days, (ii) refraining from adverse credit reporting for 90 days; (iii) offering additional time for trial loan modifications; (iv) waiving late fees and online payment fees; and (v) postponing foreclosures and evictions for 90 days.
Each guidance recommends that institutions proactively reach out to customers via app, text, email or otherwise to identify the assistance being offered.
Pennsylvania governor issues “stay at home” order
On March 19, Pennsylvania Governor Wolf issued a statewide “stay at home” order, to take effect as of March 21. Businesses engaged in “financial activities,” including those involved in credit intermediation and related activities, are considered essential businesses and may continue physical operations.
Michigan Department of Insurance and Financial Services issues FAQs for credit unions
On March 24, the Michigan Department of Insurance and Financial Services issued FAQs for credit unions. The FAQs provide responses to questions regarding continuation of examinations, credit union operations and annual meetings, working with credit union members experiencing hardship due to Covid-19, and reporting requirements.
Massachusetts Division of Banks requests notification of certain operational changes
On March 19, the Massachusetts Division of Banks sent an email asking that licensees notify their customers of temporary closure of their facilities and the availability of any alternative service options as soon as practical. It also asks licensees to notify the Division promptly regarding any location closures, business disruptions, or other significant developments relating to Covid-19, such as closure of Massachusetts offices/locations, significant staff shortages, liquidity shortages, distress with funding sources, or issues funding closed loans for Massachusetts consumers.
Indiana Securities Division issues notice to permit loan brokers and collection agents to work from home
On March 24, the Indiana Secretary of State, Securities Division (Division), issued guidance to loan broker and collection agencies in response to Covid-19, encouraging licensees to instruct their employees to work from home and refrain from any in-person meetings. The guidance reminds licensees that relevant Indiana laws and regulations place no general prohibition on individuals employed by licensees from performing work remotely from their personal residences. A temporary arrangement where an employee works from home during the Covid-19 outbreak does not require licensure as a branch office. Licensees should continue to take any necessary steps to supervise employees working remotely.
New York extends deadline for regulated institutions to submit Covid-19 response plans
On March 24, New York’s Department of Financial Services extended the deadlines for regulated institutions to respond to the Department’s March 10 requests for their plans to manage the financial and operational risk caused by Covid-19 until May 25.
California announces statewide shelter-in-place
On March 19, the California Governor announced a statewide shelter in place. Per the announcement, nonessential businesses must close. Banks are considered “essential businesses” and may remain open in California.
Indiana Securities Commissioner eases certain filing and other requirements for financial professionals
On March 24, the Indiana Securities Commissioner issued an administrative order providing relief to broker-dealers, investment advisers, and their registered agents or investment adviser representatives affected by the Covid-19 outbreak. Among other things, the administrative order provides the following relief:
- creates a temporary exemption from registration where a person is working from a location outside of the jurisdiction where that person is currently registered, as long as the person notifies the Division;
- permits firms to submit Form U4 electronically without obtaining physical signatures until it is practicable to do so;
- grants a 45-day extension of time for state registered investment advisers to adhere to any filing, updating, or customer delivery requirements required by Forms ADV; and
- extends the time to May 15 for any broker-dealer or investment adviser to submit complete responses to the 2020 Investment Adviser/Broker-Dealer Questionnaire.
Kentucky Department of Financial Institutions provide guidance to non-depository institutions
On March 24, The Kentucky Department of Financial Institutions (DFI) provided guidance to non-depository institutions to take steps to comply with CDC directives and Governor Andy Beshear’s guidance and executive orders. Entities are ordered to reduce face-to-face transactions; work with customers affected by the coronavirus to meet their financial needs; implement policies and procedures to work constructively with customers (including by restructuring existing loans, extending repayment terms, and waiving fees); manage COVID-19 related staffing issues; and ensure that business continuity plans include pandemic planning.
Alabama State Bank Dept. issues Covid-19 lending/borrowing guidance
On March 19, the Alabama State Bank Department (ASBD) issued guidance on lending and borrowing in light of Covid-19. ASBD notes that it has historically required Other Real Estate (ORE) properties that are held for five years to be written down to $1 if the bank has not received written approval of the Superintendent for an extended holding period. Effective immediately, ASBD’s guidance provides that where write-downs have been required for properties that are beyond the five-year limit, banks may discontinue the required write-downs and hold the properties at current book value.