March 24, 2020 Executive Order 202.9: Forbearance for Loan and Mortgage Payments and Suspension of Certain Fees
KEEPING YOU INFORMED…
On Saturday, Governor Cuomo signed Executive Order 202.9 as part of the State’s ongoing efforts to combat the effects of COVID-19. The Order mandates that through the declared state of emergency, any bank under the jurisdiction of the New York State Department of Financial Services (“DFS”) that does not grant forbearance of mortgage payments for a 90-day period to any person or business facing financial hardship as a result of the COVID-19 pandemic will be deemed to have engaged in an unsafe and unsound business practice pursuant to Section 39, subdivision 2, of the Banking Law. An institution found to have engaged in this type of practice may be subject to monetary penalties.
The Order further directs the Superintendent of DFS to ensure that all licensed or regulated entities in New York State provide consumers with an opportunity for a forbearance of mortgage payments for any person or entity facing financial hardship due to the COVID-19 pandemic. The Superintendent must promulgate emergency regulations to ensure that forbearance applications are widely available to consumers, and that those applications are granted “in all reasonable and prudent circumstances” during the period of the declared state of emergency.
Finally, the Executive Order authorizes the Superintendent to issue regulations that, for the period of the declared state of emergency, restrict or modify ATM fees, overdraft fees and credit card late fees. Upon issuance of the regulations by DFS, we will provide an update.
The DFS Portal at dfs.ny.gov/who_we_supervise provides a list of financial institutions or mortgage lenders subject to the Order. Please contact Patricia Delaney or Peter Zogas by calling (631) 694-2300 if you have any questions regarding the implementation of Executive Order 202.9 or need assistance with submitting an application for forbearance on behalf of an individual or entity.
THIS MEMORANDUM IS MEANT TO ASSIST IN GENERAL UNDERSTANDING OF THE CURRENT LAW. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. THOSE WITH PARTICULAR QUESTIONS SHOULD SEEK THE ADVICE OF COUNSEL.
© Lamb & Barnosky, LLP 2020