The California Department of Business Oversight and the Business, Consumer Services and Housing Agency released two new guidance documents—one for financial institutions and a second for escrow agents, finance lenders and services, student loan servicers, residential mortgage lenders and servicers, and mortgage loan originators—both addressing how to work with consumers suffering financial hardship as a result of the COVID-19 pandemic.
Encouraging financial institutions to meet the financial services needs of customers and communities, the agencies advised placing a moratorium on foreclosures arising from causes related to the pandemic and taking steps such as restructuring debt and easing terms for new loans, among other accommodations.
In addition, the new guidance suggested that banks and credit unions increase credit card limits for creditworthy borrowers, offer payment accommodations during the pandemic, waive fees (such as ATM, overdraft and late-payment fees) and raise ATM daily cash withdrawal limits.
The second guidance suggested that lenders and servicers offer payment accommodations such as allowing borrowers to defer or skip some payments or extending the payment due date, noting that “prudent efforts” to modify the terms on existing loans for affected customers will not be subject to examiner criticism. Employees can be allowed to work from home, the agencies said, as long as they use encrypted devices and don’t keep any physical business records or meet with customers at home.
To read the guidance for financial institutions, click here.
To read the guidance for escrow agents, finance lenders and services, student loan services, residential mortgage lenders and servicers, and mortgage loan originators, click here.
For more information, please contact:
Jan Owen, Senior Advisor, Manatt’s Financial Services, jowen@manatt.com or 916.552.2360