Banks and regulators urged by lawmakers to work with borrowers
Temporary disruptions from the coronavirus shouldn't lead to consumers having lower credit scores because of missed payments, Democrats on the Senate Banking Committee are telling banking trade groups and regulators in two separate letters.
Virginia Sen. Mark Warner, Ranking Member Sherrod Brown of Ohio and six other Democrats said in a letter to Federal Reserve Chairman Jerome Powell, Comptroller of the Currency Joseph Otting and other regulators on Monday that guidance should "encourage financial institutions to take steps to prevent adverse information from being reported to the credit bureaus and utilized in any manner that harms consumers affected by the virus."
The spread of the virus across continents is affecting business decisions globally as sporting events and conferences are canceled, and airlines brace for declining passenger traffic as corporations pull back on travel.
"We urge you to issue guidance to financial institutions encouraging them to work with consumers and businesses affected by the virus and to recognize that they may have difficulty accessing affordable credit and face temporary hardship in making payments on their credit obligations," Democrats said in a letter to regulators seen by Bloomberg.
Senators were even more direct with trade groups representing banks, saying they were interested in policies around sick leave, quarantines, flexible scheduling and financial assistance.
"We urge you to consider waiving overdraft and monthly service fees for affected customers, suspending or modifying student loan, mortgage and business loan payments as necessary, providing affordable, short-term credit, and encouraging customers to contact your institution's special care line so that you may work with them individually to help them avoid the negative consequences of this unique health emergency," Democrats said in a separate letter to banks.