Fair Credit Reporting Act Amended by CARES Act for Accommodations Extended to Consumers During COVID-19

Right now, many creditors may be considering making accommodations to consumers affected by COVID-19 by offering different ways to help ease the burden of existing debt obligations. In doing so, creditors should take care to follow the special credit reporting rules for such accommodations set forth in the recently passed Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).

To read the full text of this post by Duane Morris attorney Lynne Evans, please visit the Duane Morris Banking and Finance Law Blog.

CARES Act Impacts Banking and Finance Industry

The Coronavirus Aid, Relief and Economic Security (CARES) Act includes wide-ranging provisions that will have direct and indirect impacts on the banking and finance industry.

The unprecedented $2 trillion stimulus package includes, among other things, provisions for the removal of the cap on the FDIC’s guarantee of insured deposits; waiver by the OCC of single-borrower lending limits for national banks; reduction of the minimum leverage ratio for community banks; favorable accounting treatment for loan modifications; and authority for a guarantee program for the U.S. money market mutual fund industry.

To read the full text of this Duane Morris Alert, please visit the firm website.

Prepare For Additional Revolver Draws During Current Crisis

In the face of these unprecedented and uncertain days of COVID-19, financially stressed borrowers are expected to take every measure available to them to keep their businesses afloat. For borrowers with revolving credit lines, this has included drawing down unused availability to ensure immediate, and sometimes future, access to needed liquidity. In ordinary circumstances, a revolver provides a borrower flexibility to address changing cash flow needs on a cyclical or seasonal basis. Today, an untapped revolver may be a lifeline for a business struggling with the loss of cash flow.

To read the full text of this post by Duane Morris partner Rick Hyman, please visit the Duane Morris Banking and Finance Law Blog.