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Democrats urge regulators to offer lenders more coronavirus guidance

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WASHINGTON — Senate Democrats are calling on regulators to provide financial institutions with guidance on assisting consumers affected by the coronavirus outbreak.

Eight Democratic senators led by Mark Warner of Virginia are asking federal and state regulators to encourage banks to modify terms on existing loans, or extend access to credit, to businesses and consumers affected by the coronavirus.

“No one should be penalized financially or suffer financial duress for following [Centers for Disease Control and Prevention] guidance,” the senators wrote Monday in a letter to six federal agencies and the trade association for state banking regulators. “As Americans seek to comply with CDC guidance and protect the well-being of their families, many consumers may face negative shocks to household finances, including challenges paying their day-to-day bills, credit cards, student loans, small-business loans and mortgage payments, among other financial obligations.”

Sen. Mark Warner, D-Va.
Sen. Mark Warner, D-Va., and seven other Democratic colleagues also urged the heads of banking and credit union trade associations to work with their members to offer flexibility and forbearance to customers whose finances may be hurt by the coronavirus.

The letter was sent to the heads of the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corp., Consumer Financial Protection Bureau, Federal Housing Finance Agency, National Credit Union Administration and the Conference of State Bank Supervisors.

The senators’ letter comes after the Federal Financial Institutions Examination Council on Friday recommended steps banks should take to prevent any disruption of operations, minimize contact between staff and customers and plan for how affected employees reenter the workplace.

Read more: Complete coverage of the coronavirus impact

Regulators should encourage financial institutions to prevent adverse information from being reported to the credit reporting agencies Equifax, Experian and Transunion, the senators said.

They also urged the heads of seven banking and credit union trade associations to work with their members to offer flexibility and forbearance to customers whose finances may be hurt by the coronavirus.

In a separate letter, Sen. Sherrod Brown of Ohio — the ranking Democrat on the Banking Committee — and Warner urged the Department of Housing and Urban Development and the government-sponsored enterprises Fannie Mae and Freddie Mac to authorize mortgage servicers to suspend or reduce affected homeowners’ mortgage payments, waive late fees and suspend credit bureau reporting, foreclosures and other legal proceedings in order to help families cope with the effects of this health emergency.

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