Frequently Asked Questions
No. As a general matter, a bank is under no legal duty to cash a check, even one drawn on the bank by an account holder. However, the FDIC and other bank regulatory agencies have issued statements encouraging institutions to work with consumers and communities affected by COVID-19 developments. The FDIC recognizes that such efforts serve the long-term interests of communities and the financial system when conducted with appropriate management oversight and are consistent with safe and sound banking practices and applicable laws, including consumer protection laws. These efforts may include easing restrictions on cashing non-customer checks. For example, some banks have voluntarily decided to cash non-customer’s economic impact checks without charging a fee.
For more information on assisting consumers in light of COVID-19 developments, see the FDIC’s Statement on Financial Institutions Working with Customers Affected by the Coronavirus and Regulatory and Supervisory Assistance (FIL-17-2020), issued on March 13, 2020.
Financial institutions can provide payment accommodations that modify, extend, suspend, or defer the repayment terms on SBA-guaranteed loans to borrowers affected by COVID-19. While the majority of payment accommodations do not require SBA approval, financial institutions should determine what types of modifications require the SBA’s approval. More information regarding the SBA’s programs is available on the SBA website.
For institutions that report credit payment histories to a credit reporting agency, Section 4021 of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (CARES Act) amends the Fair Credit Reporting Act2 to provide relief from negative credit reporting for those who seek payment modifications or forbearances because of the coronavirus pandemic. Under Section 4021, during the period of January 31, 2020 until 120 days after the end of the national coronavirus emergency declaration, if a financial institution makes an accommodation for one or more payments, and the borrower fulfills the terms of the accommodation, the institution should report the account as current. However, if an account was delinquent before the coronavirus pandemic, the financial institution can continue to report the account as delinquent unless the account is brought current. Further, Section 4021 does not apply to accounts that have been charged off.
The credit reporting agencies have provided guidance regarding the credit reporting coding options available for furnishers of credit report information during disasters and specifically the COVID-19 emergency. Furnishers are encouraged to review the options available to determine the appropriate coding policy for their borrowers.
The Consumer Financial Protection Bureau (CFPB) has released a statement reiterating that financial institutions must follow the provisions of the CARES Act. Refer to the CFPB for more information regarding the FCRA. In addition, the FDIC encourages financial institutions to provide borrowers affected by the COVID-19 outbreak with payment accommodations that facilitate their ability to work through the immediate impact of the virus.
Yes. Financial institutions can consider alternative service options to provide access to financial services. Financial institutions may want to remind customers of the various ways they can access banking services without physically coming to a facility, such as managing their accounts online, performing transactions at an automated teller machine (ATM), using telephone banking, or accessing a mobile banking application. Financial institutions could also provide information about how to use electronic payments, bill pay, and mobile remote deposit capture services.
Providing regularly updated information about the operating status of the bank, branch offices, remote access facilities, and mobile and online services as pandemic conditions evolve could be helpful to customers. Posting this information on the institution’s website, providing recorded information on its customer support lines, and pushing notifications out to customers that have signed up for alerts are just some of the ways institutions could help customers.
Yes. The FDIC encourages financial institutions to provide borrowers affected in a variety of ways by the COVID-19 outbreak with payment accommodations that facilitate their ability to work through the immediate impact of the virus. Such assistance provided in a prudent manner to borrowers facing short-term setbacks could help the borrower and a community to recover. The FDIC understands that effective loan accommodation programs may involve protracted resolutions, but all should be ultimately targeted toward loan repayment.
Financial institutions may want to consider addressing any deferred or skipped payments by either extending the original maturity date or by making those payments due in a balloon payment at the maturity date of the loan. When deferring or skipping payments, providing borrowers with accurate disclosures that are consistent with federal and state consumer
protection laws will help to avoid any misunderstandings relative to the changes in the terms. Financial institutions can call their FDIC Regional Office, which can assist them by discussing key considerations and regulations on payment accommodations and disclosures.
Please check back frequently to see new and updated resources. For further information, please refer to FDIC guidance on COVID-19 response.