March 19, 2020

Coronavirus: Regulators Encourage Banks to “Work with Customers”

Coronavirus: Regulators Encourage Banks to “Work with Customers”

Megan F. Fry is a Shareholder in the commercial litigation department representing financial institutions and small business clients.

PENSACOLA (March 19, 2020) –

Both the FDIC and OCC have issued letters responding to bankers’ requests for leniency from regulators as banks begin to work with their customers to address the potential business impact of COVID-19. Regulators are encouraging financial institutions to take steps to assist customers and affected communities. Regulators have recognized that this effort is consistent with safe and sound banking practices and indicated these actions may not be subject to examiner criticism.

Financial institutions are encouraged to work with all borrowers, especially borrowers from particularly vulnerable industry sectors. To that end, many financial institutions are in the process of finalizing processes for payment deferrals, short term loan modifications and forbearance agreements. Small business clients should expect that financial institutions will require current financial statements from the borrower and guarantors in connection with any payment deferral or forbearance request. Additionally, small business clients should have available their business continuity plans, or a plan addressing what other steps it is taking, such as obtaining short term relief from the Small Business Administration or similar program, for their banker to review.

Yesterday, the U.S. Department of Housing and Urban Development announced a 60-day moratorium on foreclosure actions for single-family homeowners who are unable to pay FHA-backed mortgages amid the pandemic. FHA announced similar relief for Fannie Mae and Freddie Mac loans. It is too early to predict whether a similar moratorium will be enacted for small business loans by either regulators or court systems. That said, small businesses should be proactive and contact their lenders early to make plans for continued access to revolving lines of credit and make a repayment plan if it will be impacted by this crisis.


Megan F. Fry is a shareholder in the commercial litigation department representing financial institutions and small business clients.  Contact Megan at (850) 432-2180 or

About Clark Partington:

Clark Partington is the largest business focused firm in the Florida panhandle with offices in Pensacola, Destin, Grayton Beach & Tallahassee.  The firm also maintains a presence in South Alabama with an Orange Beach office.  Since 1976 Clark Partington has grown to over forty lawyers and has served the people and businesses of Florida through an innovative and collaborative approach to practicing law.  Our lawyers are consistently recognized for their service to the profession and excellence in the courtroom.  More information about the firm’s practice, its attorneys, and recognitions may be found at