As Congress scrambles to pass a stimulus package to alleviate financial strain due to the COVID-19 pandemic, federal regulators and some states are directing financial institutions to provide immediate relief. So far, government entities have largely issued guidance, rather than directives. Over the weekend, however, New York Governor Andrew Cuomo empowered the Superintendent of the New York Department of Financial Services (DFS) to direct financial institutions to restrict or modify ATM, overdraft, and credit card late fees. [1] (See Executive Order 202.9, Continuing Temporary Suspension and Modification of Laws Relating to the Disaster Emergency, dated March 21, 2020.)
While DFS has not yet issued such regulations, it will likely do so in the coming days. Any required modification or restriction of fees will occur pursuant to DFS’s power over licensed or regulated entities, taking into account the financial impact on consumers in New York, safety and soundness, and any applicable federal requirements—so the Executive Order does not purport to extend DFS’s jurisdiction over national banks and other financial institutions it does not already regulate. It is likely, however, that DFS will not be the only regulator to impose such requirements.
To date, the OCC, FDIC, CFPB, Federal Reserve, states governors and agencies, and others have issued guidance for measures that financial institutions can take to provide immediate relief in a safe and sound manner. The OCC, FDIC, Federal Reserve, and the National Credit Union Administration have advised that financial institutions should consider proactively waiving certain deposit fees, including ATM fees for customers and non-customers, overdraft fees, late payment fees on credit cards and other loans, and early withdrawal penalties on time deposits. Some financial institutions have already implemented such measures on a temporary basis, e.g., 90 or 120 days.
Other recommended measures include increasing ATM daily cash withdrawal limits, easing restrictions on cashing out-of-state and non-customer checks, increasing credit card limits for creditworthy borrowers, and offering payment accommodations such as deferring or skipping payments or extending payment due dates, which would avoid delinquencies and negative credit bureau reporting caused by COVID-19-related disruptions. The CFPB and certain states have advised a more reactive approach, instead advising customers to reach out to their financial service providers themselves, and advising financial institutions to work out solutions directly with customers.
Here are links to specific guidance that we have identified to date:
Office of the Comptroller of the Currency:
Federal Deposit Insurance Corporation:
Federal Reserve Board:
Consumer Financial Protection Bureau:
National Credit Union Administration:
Alabama:
Connecticut:
Florida:
Kentucky:
Montana
New Jersey:
New York
Pennsylvania:
Vermont
Washington:
[1] Governor Cuomo also directed DFS to make applications for forbearance of mortgage payments widely available for consumers—keep an eye out for a separate alert rounding up mortgage-related developments later this week.
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