Federal regulators urged banks such as Wells Fargo and JPMorgan Chase to work “constructively” with borrowers affected by the coronavirus outbreak, promising the companies wouldn’t get dinged by examiners as long as the measures show good judgment.
The joint statement was issued on Monday by the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, the National Credit Union Administration, the Conference of State Bank Supervisors and the Consumer Financial Protection Bureau.
“Regulators note that financial institutions should work constructively with borrowers and other customers in affected communities,” the statement said. “Prudent efforts that are consistent with safe and sound lending practices should not be subject to examiner criticism.”
That could mean some form of forbearance, meaning the banks would give borrowers extra time to pay their mortgages. Other measures banks might take are: Raising credit lines, waiving fees for early withdrawals from certificates of deposit, and refunding late payment charges.
More than 750 people in the U.S. have been confirmed to have the virus that causes COVID-19, and 26 have died. The number of people infected may be much higher, as the U.S. has lagged other countries in making testing kits available.
Health officials are asking anyone who has come in direct contact with a person infected with the coronavirus to “self-quarantine” for 14 days, meaning they voluntarily stay at home. That often means they can’t earn a paycheck.
“The agencies recognize the potential impact of the coronavirus on the customers, members, and operations of many financial institutions and will provide appropriate regulatory assistance,” the joint statement said.
The regulators also promised to reschedule examinations and take other measures to help banks deal with staffing shortages that might result from the spread of the virus.
“The agencies understand that many financial institutions may face current staffing and other challenges,” the statement said. “In cases in which operational challenges persist, regulators will expedite, as appropriate, any request to provide more convenient availability of services in affected communities. The regulators also will work with affected financial institutions in scheduling examinations or inspections to minimize disruption and burden.”