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1 1 (March 31, 2020)

handle is hein.crs/govcrzy0001 and id is 1 raw text is: Researh Sevice COVID-19: The Financial Industry and Consumers Struggling to Pay Bills Updated March 31, 2020 A growing number of cases of Coronavirus Disease 2019 (COVID- 19) have been identified in the United States, significantly impacting many communities. For background on the coronavirus, see CRS In Focus IF11421, COVID-19: Global Implications and Responses, by Sara M. Tharakan et al. While this situation is evolving rapidly, the economic impact may be large due to illnesses, quarantines, and other business disruptions. Consequently, many Americans may lose income and face financial hardship due to the coronavirus outbreak. This Insight focuses on regulatory and policy responses relating to the financial services industry for consumers who may have trouble paying their bills. Payment Relief for Consumer Loans On Monday, March 9, federal and state financial regulators coordinated a statement to the financial industry, encouraging it to help meet the needs of consumers affected by the coronavirus outbreak. They stated that financial institutions should work constructively with borrowers and other consumers in affected communities, as long as they employ prudent efforts that are consistent with safe and sound lending practices. This statement was similar to financial regulators' past statements during disruptive events, such as natural disasters and government shutdowns. Since then, in order for financial institutions to be in a better position to support consumers' financial needs during this time, federal bank regulators have made adjustments to bank regulation (for more information, see CRS Insight INI 1278, Banking Regulators 'Response to COVID-19, by Andrew P. Scott and David W. Perkins) and provided liquidity to financial markets in response to COVID-19 (for more information, see CRS Insight Ni 1259, Federal Reserve: Recent Actions in Response to COVID-19, by Marc Labonte). Moreover, financial regulators have also encouraged financial institutions to provide small dollar loans to affected consumers. During previous natural disasters, government shutdowns, or other similar events, the financial industry has responded by providing financial assistance to some affected consumers. For example, they sometimes help consumers having temporary difficulties paying their mortgages, credit cards, or other loans through forbearance plans, which are agreements that allow extended time for consumers to become current on their payments. Financial institutions may also agree to limit late or other fees and extend Congressional Research Service https://crsreports.congress.gov IN11244 CRS NStGHT Prepaimed for Mernbei-s and Co-mmittees of Con-gress

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