The Consumer Financial Protection Bureau issued a public statement to encourage its supervised entities to help consumers affected by Hurricane Harvey.
As the top industry watchdog and the bureau that enforces any wrongdoing in the financial services sector, the bureau’s statement is intended to give examples and advise institutions on how they can help in the relief efforts.
“This event will cause financial strain on consumers and communities. By providing flexibility and other assistance to consumers in communities under such stress, supervised entities can lessen negative impacts and hasten recovery,” the bureau stated. “These efforts may also build goodwill and provide other benefits to the institutions undertaking them. When communities thrive, so do the financial institutions that serve them.”
For starters, the CFPB outlined some options that companies have already begun to offer.
When applicable, the CFPB said it encourages supervised entities to address consumers’ needs by taking the following actions in the aftermath of Hurricane Harvey:
- Offering penalty-free forbearance or repayment periods with clearly disclosed terms.
- Limiting or waiving fees and charges, including overdraft fees, ATM fees, or late fees;
- Restructuring existing debt by, for example, extending repayment terms with clearly disclosed terms.
- Refinancing existing debt or extending new credit with terms favorable to the consumer. Terms could, for example, reduce costs, limit payment amounts, or offer consumers other flexibility.
- Easing documentation or credit-extension requirements.
- Increasing capacity for customer service hotlines, particularly those that serve consumers in languages other than English.
- Increasing ATM daily cash withdrawal limits.
Along with these initial actions, the CFPB said supervised entities should make use of existing regulatory flexibility if it would benefit consumers affected by a major disaster or emergency.
Below is only one example, see here for more.
Regulation B (implementing the Equal Credit Opportunity Act)
Regulation B requires creditors to provide applicants for first-lien loans on a dwelling with copies of appraisals, as well as other written valuations, developed in connection with the application promptly upon completion, or three business days prior to consummation of the transaction (for closed-end credit) or account opening (for open-end credit), whichever is earlier. However, the consumer may waive the timing requirement and agree to receive any copy at or before consummation or account opening, except where otherwise prohibited by law.
Given the size of the industry, the CFPB acknowledged that there may by institutions under its supervision that experience difficulties due to a major disaster or emergency themselves. In this situation, the bureau said when conducting examinations and other supervisory activities, it will consider the circumstances that supervised entities may face following a major disaster and will be sensitive to good faith efforts to assist consumers.
Outside of the CFPB, other government agencies are also stepping up to aide in the relief. Fannie Mae and Freddie Mac announced a number of measures that mortgage servicers can take to aid borrowers whose homes were damaged by the storm, including mortgage forbearance and other options.
The U.S. Department of Housing and Urban Development also announced it is offering mortgage and foreclosure relief as well as other assistance to some families, including to the 200,000 FHA-insured homeowners, living in the impacted areas.
“Today, our thoughts and prayers are with those who are beginning the process of recovering from Hurricane Harvey,” HUD Secretary Ben Carson said. “As FEMA begins to assess the damage and respond to the immediate needs of residents, HUD will be there to offer assistance and support the longer-term housing recovery efforts.”