Following
Governor Cuomo’s announcement on a 90-day
mortgage relief plan for borrowers affected by the novel
coronavirus (COVID-19), the New York State Department of Financial Services
(DFS) issued Guidance
to regulated financial institutions concerning its implementation. The Guidance
urges all regulated financial institutions to do their part in curtailing the
effects of COVID-19 on consumers and small businesses by:
- Waiving overdraft fees;
- Providing new loans on favorable terms;
- Waiving late fees for credit card and other loan balances;
- Waiving automated teller machine (ATM) fees;
- Increasing ATM daily cash withdrawal limits;
- Waiving early withdrawal penalties on time deposits;
- Increasing credit card limits for creditworthy customers;
- Offering payment accommodations, such as allowing loan customers to defer payments at no cost, extending the payment due dates or otherwise adjusting or altering terms of existing loans, which would avoid delinquencies, triggering events of default or similar adverse consequences, and negative credit agency reporting caused by COVID-19 related disruptions;
- Ensuring that consumers and small businesses do not experience a disruption of service if financial institutions close their offices, including making available other avenues for consumers and businesses to continue to manage their accounts and to make inquiries;
- Alerting customers to the heightened risk of scams and price gouging during the COVID-19 disruptions, and reminding customers to contact their financial institutions before entering into unsolicited financial assistance programs; and
- Proactively reaching out to customers via app announcements, text, email or otherwise to explain the above-listed assistance being offered to customers.
Regulated
financial institutions are also urged “to work with and provide accommodations
to their borrowers during this unprecedented global emergency to the extent
reasonable and prudent.” This includes holding off on taking adverse action for
defaults. Regulated financial institutions include mortgage bankers, mortgage
loan servicers, banks and trust companies, among others. For a full list of
DFS-regulated financial institutions, click HERE.
While
the efforts of DFS and New York State are definitely acknowledged and
appreciated, Borrowers should be aware that the Guidance is simply that,
guidance. The Guidance does not legally require financial institutions to take the
above-listed actions and only encourages them to do so.
Stay
tuned for more updates from New York State and DFS as to specific procedures on
the NYS mortgage relief plan.
