WASHINGTON— Five federal financial agencies and a trade group for state banking regulators have committed to provide “appropriate regulatory assistance” to banks whose customers may be harmed by the coronavirus outbreak, as U.S. markets tumbled in response to the threat the virus poses to the economy.
The Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the Consumer Financial Protection Bureau, the National Credit Union Administration and the Conference of State Bank Supervisors in a joint statement urged financial institutions to meet the needs of customers.
“Regulators note that financial institutions should work constructively with borrowers and other customers in affected communities,” the agencies said in a news release Monday. “Prudent efforts that are consistent with safe and sound lending practices should not be subject to examiner criticism.”
Read more: Complete coverage of the coronavirus impact
The regulators also pledged to expedite requests to provide more convenient services to communities hit by the virus and to work with affected banks in scheduling exams to ensure minimal disruption to bank operations.
Senate Democrats earlier Monday had said more regulatory guidance for financial institutions was needed on how to help consumer and commercial borrowers whose income streams were disrupted by the outbreak.
The Federal Financial Institutions Examination Council released a 10-page interagency statement Friday recommending steps banks should take to proactively prevent disruption of operations, minimize contact between staff and customers and plan for how affected employees reenter the workplace, among other things.
“Pandemic planning presents unique challenges to financial institution management,” the FFIEC said in the interagency statement. “Unlike natural disasters, technical disasters, malicious acts, or terrorist events, the impact of a pandemic is much more difficult to determine because of the anticipated difference in scale and duration.”
In that guidance, regulators advised banks to develop a program to reduce the likelihood that an institution’s operations will be significantly affected by a pandemic, as well as a strategy for recovering from a pandemic.
Monday’s joint statement from the regulators coincided with the worst day for the Dow industrials since 2008, with markets plunging 7.8% as investors panicked over the rapid spread of the virus.