As both COVID-19 and the closings designed to slow its path continue having their effects across the country and across the U.S. economy, consumers are rightly concerned about the impact on their financial lives.
FDIC, NCUA Offer Guidance to Banks and Credit Unions
As early as March 9, the FDIC encouraged financial institutions to help meet the needs of those customers and members affected by the coronavirus. This assistance may include, for example, waiving fees on late or missed credit card or loan payments, waiving early withdrawal penalties for out-of-work savers who need access to money locked up in CDs, or offering affected borrowers the ability to defer or skip making loan payments for a finite period of time.
The FDIC has since added to its website consumers’ frequently asked questions about the impact of COVID-19 on their banking relationships. These FAQs are being updated every few days.
Similarly, the National Credit Union Administration, which protects all federal (and most state) credit union deposits, is encouraging credit unions to assist affected members by allowing them to defer or skip some payments, extending payment due dates and waiving late fees and out-of-network ATM fees. Credit unions also are encouraged “to use responsible small-dollar lending” to help individual and small business members during this crisis. The NCUA addresses credit union members’ frequently asked questions.
U.S. Chamber Encourages Banks to Aid Small Business Owners
With the passage of the $2 trillion federal stimulus package, also known as the CARES Act, relief is already making its way to small business owners affected by COVID-19. The Small Business Administration’s Economic Injury Disaster Loans, which have been available for decades to assist small business owners in times of natural disaster, are a primary source of relief. Banks also are awaiting specific guidance on the CARES Act’s Paycheck Protection Program Loan Guarantee.
In a March 30 press call, U.S. Chamber of Commerce vice president of small business policy Tom Sullivan spoke of empowering the banks themselves, in partnership with Treasury and the SBA, to do everything they can to help small business owners: “We are focused on speed, and the banks’ being able to get money onto Main Street immediately.”
Getting information into the hands of small business owners is the Chamber’s top priority (uschamber.com/sbloans). “What’s really driving us,” Sullivan said, “is the belief that no family or business should be ruined by the economic disruption caused by the coronavirus epidemic.”
New York State Requires Banks to Provide Relief
On March 24, New York State’s Department of Financial Services issued a new emergency regulation requiring New York regulated financial institutions to provide financial relief to New Yorkers who demonstrate financial hardship from the COVID-19 pandemic.
For these individuals, the emergency regulation, adopted pursuant to Governor Andrew M. Cuomo’s Executive Order No. 202.9, asks banks to eliminate their ATM fees, overdraft fees and credit card late payment fees. And this guidance is only the starting point: Regulated institutions “are encouraged, consistent with safe and sound banking practices,” to assist individuals with a demonstrated COVID-19-related financial hardship “in any additional manner they deem appropriate.”
Banks in New York State have 10 business days from the date of the regulation to inform customers of what relief will be offered and how they can apply.
Banks and Credit Unions Respond to Consumers’ Needs
Over the past several weeks, financial institutions including retail banks and credit unions have been putting their response plans in place and refining them as situations change. Here’s how some banks and credit unions are offering relief to customers affected by the coronavirus. Bookmark this post and come back for regular updates.
On March 18, Ally shared measures it will implement to offer relief to those experiencing financial hardship due to the coronavirus pandemic.
Here’s how the bank is offering assistance:
- Ally is waiving all fees related to expedited checks and debit cards, overdrafts and excessive transactions on savings and money market accounts until July 18, 2020.
- Auto loan payments can be deferred for up to 120 days. Referral requests for deferral of up to 120 days can be made online. No late fees will be charged, but finance charges will accrue. After payments resume, the contract will be extended by the number of months payment was deferred.
- Home loan payments for existing customers can be deferred for up to 120 days. No late fees will be charged, but interest will accrue. For payment assistance, customers are encouraged to apply via their Ally account online, in order to avoid long call wait times at 866-401-4742.
Ally is strongly encouraging customers to utilize its online self-service access and the Ally mobile apps, to avoid longer call wait times. Customers can continue to transfer money and make payments online as usual. For depositing checks of $50,000 or less, it’s faster to deposit them online via the mobile app than to submit by mail.
With most Ally associates working from home during this “unprecedented situation,” Ally asks for customers’ understanding if customers hear an occasional child or pet in the background while on a call with the bank.
For more information and updates, visit Ally’s coronavirus help page.
Bank of America
On March 12, Bank of America emailed information to Forbes about potential measures it was ready to take in response to the coronavirus:
“We continue monitoring the developments of coronavirus and are always prepared to support our clients facing financial hardship or loss of income due to illness. All employees who work directly with our clients are trained to identify and assist impacted clients and provide the right support to address their unique personal needs. As part of our regular practice, we offer assistance to qualifying consumer and small business clients facing hardships, including forbearance with certain fees.”
Bank of America customers who need help making credit card or mortgage payments can now apply for a payment deferral online. A video has been added to the bank’s coronavirus help page (linked below) to explain the additional assistance the bank is offering to clients and small businesses, which now have their own coronavirus help resource.
On March 19, Bank of America announced additional support that will be provided, working on a case-by-case basis, including:
- For consumer and small business deposit accounts, clients can request refunds of overdraft, insufficient funds and monthly maintenance fees.
- Clients can request to defer payments and refunds of late fees on their small business loans.
- On auto loans, personal loans, mortgages and home equity loans, clients can request deferral of payment, with those payments added to the end of the loan. So long as clients are up to date, no negative credit bureau reporting will be made.
Clients facing financial hardships related to the coronavirus are encouraged to visit Bank of America’s coronavirus help page and contact the client services team………Read More>>