Requires All Regulated Financial Institutions to Grant Mortgage Payment Forbearances During the Disaster Emergency Period; and Authorizes Regulations to Reduce ATM, Overdraft and Credit Card Late Fees During the Disaster Emergency Period
On March 21, 2020, New York Gov. Andrew Cuomo issued Executive Order No. 202.9, pursuant to his broad emergency powers to temporarily suspend or modify statutes, local laws, ordinances, rules and regulations during periods of disaster emergencies, to do the following:
- Provide that it is an unsafe and unsound business practice for banks chartered under New York State law to not grant ninety-day forbearances to all persons and businesses who have a financial hardship as a result of the COVID-19 pandemic, subjecting non-complying banks to seizure by the Superintendent of the Department of Financial Services, fines and, after warning, removal of officers and directors and other remedial actions.
- Direct the superintendent of the New York State Department of Financial Services to promulgate emergency regulations requiring under reasonable and prudent circumstances all entities licensed by the Department of Financial Services to provide to any consumer in the state of New York a forbearance of payments for mortgages during the period of the disaster emergency if the consumer is facing a financial hardship due to the COVID-19 pandemic.
- Empower the superintendent of the Department of Financial Services to promulgate emergency regulations to restrict or modify during the period of the disaster emergency the imposition by all entities licensed or regulated by the Department of Financial Services of ATM fees, overdraft fees and credit card late fees, taking into account the financial impact on the New York consumer, the safety and soundness of the licensed or regulated entity, and any applicable federal requirements.
For purposes of orders 2 and 3 above, covered entities include all banks chartered under New York law, all bank holding companies, all registered mortgage brokers, all licensed mortgage bankers, all registered mortgage loan servicers, all licensed mortgage loan originators, all licensed lenders, all licensed cashers of checks, all licensed sales finance companies, all licensed insurance premium finance agencies, all licensed transmitters of money, all licensed budget planners, all out-of-state banks that maintain a branch or branches or representative or other offices in New York State, and all foreign banking corporations licensed by the superintendent of the Department of Financial Services to do business in New York.
The executive order does not define what actions or remedies are subject to mandatory forbearance by banks for purposes of order 1 above. In addition, it does not define which persons or entities qualify as consumers for purposes of order 2 above. Furthermore, it does not define what constitutes a financial hardship for purposes of order 1 or 2 above.
The provisions of the executive order are effective from March 21, 2020, until April 20, 2020.
We will be providing updates to this Alert once the referenced emergency regulations are enacted or modifications to this executive order are issued.
The full text of the executive order can be found here.