On January 11, 2019, the Federal Reserve Board, CSBS, CFPB, FDIC, NCUA, and OCC released a joint statement urging financial institutions to work with borrowers affected by the federal government shutdown. According to the joint statement, borrowers may face “temporary hardship in making payments on debts such as mortgages, student loans, car loans, business loans, or credit cards.” The regulators go on to state that prudent workout arrangements to help affected borrowers, such as extending new credit and modifying existing loan terms, should not be subject to examiner criticism provided the efforts are “consistent with safe-and-sound lending practices. The FDIC further specified that, for all FDIC-supervised institutions, such arrangements also may include waiving fees, easing limits on credit cards, allowing deferred or skipped payments, and delaying delinquency notice submissions to credit bureaus.
Earlier this month, FHA issued a letter concerning the shutdown to remind FHA-approved mortgagees and lenders of their “ongoing obligation to offer special forbearance to borrowers experiencing loss of income.” As a result, mortgagees are expected to extend special forbearance plans to borrowers impacted by the shutdown, and, whenever possible, fully evaluate borrowers for available loss mitigation options to avoid foreclosure. Also, FHA urges mortgagees and lenders to waive late fees and suspend credit reporting on impacted borrowers.