COVID-19: New NYS Executive Order Changes Banking Law

Legal Alert From Barclay Damon LLP
COVID-19: New NYS Executive Order Changes Banking Law

March 23, 2020

 

COVID-19: New NYS Executive Order Changes Banking Law

On March 21, Governor Andrew Cuomo issued Executive Order 202.9, invoking his new powers from a law passed to combat the COVID-19 pandemic. These powers expand the governor’s authority to temporarily suspend, modify, or issue directives in response to New York State’s declared disaster emergency.

The order modifies the NY Banking Law by deeming the refusal to grant a forbearance to any person or business who has a financial hardship due to COVID-19 as an “unsafe and unsound business practice.” The order directs the Department of Financial Services superintendent to ensure licensed and regulated entities provide consumers with the opportunity for a forbearance of mortgage payments, with the forbearance being granted “in all reasonable and prudent circumstances.” The superintendent is also mandated to implement emergency regulations to carry out this directive.

Additionally, the order allows the superintendent to declare emergency regulations that restrict or modify ATM fees, overdraft fees, and credit card late fees for the period of the declared disaster emergency. These regulations will take into account “the financial impacts on consumers, the safety and soundness of the licensed or regulated entity, and applicable federal requirements.”

Under Governor Cuomo’s new authority, he has the power to suspend, modify, or issue these directives for 30 days. Unlimited 30-day extensions with the consent of the legislature after each subsequent period are allowed. Unless an extension occurs, Executive Order 202.9 will expire on April 20.

Barclay Damon is monitoring this fast-changing situation and will send updates as new information becomes available.