Regulators Urge Credit Unions, Banks to Extend ‘Prudent’ Help to Borrowers in Absence of Congressional Action

Congress is deadlocked over economic help for people impacted by the coronavirus crisis, so federal financial regulators and a key senator are urging financial institutions to do what Congress has not been able to do.

Key assistance programs, such as enhanced unemployment benefits and rental assistance programs have or are about to expire if Congress does not renew them. Lawmakers and the Trump Administration have been negotiating over how best to provide continued assistance to people affected by the pandemic.

The Federal Financial Institutions Examination Council, of which the National Credit Union Administration is a member, is telling financial institutions that they should offer “prudent options” for additional accommodations to affected borrowers. The agencies said that they view loan accommodations as “positive actions which can mitigate adverse effects on borrowers caused by the COVID event.”

By working with borrowers, financial institutions can help borrowers avoid delinquencies or other problems, the council said.

At the same time, Senate Banking Chairman Mike Crapo (R-Id.) urged the financial regulators to continue to enhance liquidity to institutions and to use their existing authority to extend certain provisions of the already enacted stimulus legislation.

“Although there are already early, encouraging signs that the U.S. economy is beginning to heal, federal financial regulators must remain diligent, and continue to provide relief in light of a pandemic and economic conditions that continue to evolve,” he said in the letter.

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