Banks responding to the needs of low- and moderate-income communities during the economic crisis caused by the coronavirus will receive credit for these activities under the Community Reinvestment Act, according to a joint statement from the three federal bank regulators.
The Federal Reserve Board, the FDIC and the Office of the Comptroller of the Currency said in the statement that they agencies recognized the potential for the COVID-19 “to adversely affect the customers and operations of financial institutions.”
The agencies in previous memos had encouraged financial institutions to work with affected customers and communities. In the joint statement released March 19 said they would favorably consider retail banking services and retail lending activities in a bank’s assessment areas that respond to the needs of low- and moderate-income individuals, small businesses, and small farms affected by COVID-19. The activities must also be consistent with safe and sound banking practices.
- Waiving certain fees, such as ATM fees for customers and non-customers, overdraft fees, late payment fees on credit cards and other loans, and early withdrawal penalties on time deposits.
- Easing restrictions on cashing out-of-state and non-customer checks.
- Expanding the availability of other short-term, unsecured credit products for creditworthy borrowers.
- Increasing credit card limits for creditworthy borrowers.
The agencies have also encouraged banks to offer payment accommodations, such as allowing borrowers to defer or skip payments or extending the payment due date, which would avoid delinquencies and negative credit bureau reporting, caused by COVID-19-related issues.
Restructuring a borrower’s debt obligations and easing terms for new loans could also receive CRA consideration. Community development activities, such as support for health care and food supply provisions, will also be considered.
“The COVID-19 emergency has had a significant economic impact that may extend beyond banks’ assessment areas,” the agencies said in the statement. “Therefore, the agencies are reminding institutions that favorable consideration will be given to community development activities located in a broader statewide or regional area that includes a bank’s CRA Assessment Area and that help to stabilize communities affected by the COVID-19, provided that such institutions are responsive to the community development needs and opportunities that exist in their own assessment area(s).”
