WASHINGTON (Reuters) - A group of U.S. Senate Democrats is urging banks and their regulators to accommodate borrowers who may struggle financially amid the spread of the coronavirus.
In separate letters sent to the industry and watchdogs, the lawmakers said temporary hardships that could come with the wide spread of coronavirus should not be punished, and banks should endeavor to help those people and businesses whenever possible.
In an effort to control the spread of the disease, the U.S. Centers for Disease Control and Prevention has recommended, among other things, people stay home for two weeks if returning from a high-risk country. Now, senators are pushing the financial sector to ensure those people do not suffer financially for it.
“No one should be penalized financially or suffer financial duress for following CDC guidance,” they wrote.
The letter was signed by every Democrat on the Senate Banking Committee, including Senators Mark Warner of Virginia, Sherrod Brown of Ohio, and former presidential candidate Elizabeth Warren.
The lawmakers urged regulators, including the Federal Reserve, to issue guidance encouraging banks to work with consumers and businesses struggling due to the virus. The guidance could include allowing banks to modify terms on existing loans or extend new credit to help borrowers facing temporary hardships from the disease’s spread, they said.
The banking industry should offer flexibility and loan forbearance to customers facing financial hardship due to the disease, the senators said.
Reporting by Pete Schroeder; Editing by Tom Brown