Agencies Issue Revised Joint Statement on Loan Modifications for Customers Affected by Coronavirus

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On April 7, 2020, the Federal Reserve Board, FDIC, NCUA, OCC, CFPB, and the Conference of State Bank Supervisors issued a joint statement, revising a statement the agencies had previously issued on March 22, 2020, concerning loan modifications for customers affected by the COVID-19 health crisis. WBK covered the previously-issued statement here.

The revised joint statement clarifies the interaction between the joint statement and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was passed on March 27, 2020. The revision sets forth accounting and reporting considerations for loan modifications subject to the CARES Act. In addition, the revised statement provides guidance for loan modifications that do not fall under the CARES Act but are related to the COVID-19 health crisis.

The revision also provides the agencies’ views on consumer protection issues during the COVID-19 health crisis. The agencies stated that they “do not expect” to bring an enforcement action against an institution when the institution has worked with a consumer in good faith to address circumstances related to the COVID-19 national emergency; has taken good faith efforts to comply with consumer protection requirements; and has responded to any needed corrective action.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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