Oregon DCBS Issues Guidance to In-State Lenders in Response to COVID-19

By Litigation Practice Group

On March 20, 2020, the Oregon Department of Consumer and Business Services (“DCBS”) published Bulletin No. DFR 2020-07 (the “Bulletin”) to provide guidance to Oregon-regulated lenders and loan servicers in extending help to borrowers struggling through the COVID-19 pandemic. Recognizing the difficulty that many Oregon businesses and individuals will and may have in repaying their loans during the financial uncertainty caused by the novel infectious coronavirus, the Bulletin offers suggested accommodations financial institutions may offer to their borrowers during these unusual times.

Suggested accommodations include 90-day extensions, forbearances, and postponements in connection with mortgage payments, extensions, and foreclosures; adjusting the terms of existing loans; refraining from reporting late payments and waiving late and online payment fees for 90 days; proactively reaching out to borrowers; and waiving overdraft and nonsufficient fund fees. While not mandatory, DCBS stresses that these measures are in the public interest and that “Oregon regulated lenders . . . will not be subject to regulatory criticism by the division for making reasonable and prudent efforts” to assist borrowers affected by the pandemic. The guidance applies to banks, credit unions, mortgage loan originators, finance lenders, mortgage servicers and payday loan and title loan lenders.

The Bulletin follows guidance and orders from the Federal Government last week extending protections to certain borrowers. The Department of Housing and Urban Development (“HUD”) and the Federal Housing Finance Agency (“FHFA”) announced a temporary moratorium on all foreclosures and evictions related to certain HUD-backed loans. The Consumer Financial Protection Bureau (“CFPB”) had previously encouraged financial institutions to work with their borrowers whose ability to repay has been affected by COVID-19. The Department of Education is offering similar temporary relief to those with student loan debt.

At Saalfeld Griggs we continue to monitor developments as national, state and local governments respond to the coronavirus pandemic. We will provide further updates as they become available.