WASHINGTON (Reuters) – U.S. federal and state financial regulators are encouraging lenders to help borrowers affected by the coronavirus, and will not penalize them for doing so, the regulators said in a joint statement on Sunday.
The regulators said they will not criticize banks for “safe and sound” loan modifications or direct the lenders to categorize them as “troubled debt restructurings” – something that could affect their financial wellness.
The statement comes after the industry expressed concerns they might face regulatory penalties, such as higher capital requirements, for offering leniency on loans for the expected swell of borrowers who become delinquent because of the coronavirus.
Regulators joining the statement included the Federal Reserve, the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Conference of State Bank Supervisors.
Reporting by Pete Schroeder and Michelle Price; Writing by Lauren Tara LaCapra; Editing by Daniel Wallis