The Grand Rapids Business Journal spoke to Warner Norcross + Judd LLP Partner Jeffrey A. Ott in this week’s issue for an article titled, “Attorney: CARES Act to help banks help borrowers.”
Although CARES Act provisions related to workers, businesses and families have received most of the attention, a lesser-discussed portion of the Act, Division A, Title IV, “Economic Stabilization and Assistance to Severely Distressed Sectors of the United States Economy,” will give banks greater ability to help borrowers and includes certain consumer protections.
In particular, Division A, Title IV addresses bank reporting requirements related to troubled debt restructurings. According to Ott, TDR requirements can hurt a bank’s earnings, unintentionally acting as a penalty for modifying a loan during a short-term crisis such as COVID-19. The new guidance removes this reporting requirement and will allow financial institutions to make loan modifications at their discretion.
Grand Rapids Business Journal subscribers can read the full article, including highlights of the legislation’s consumer protections, HERE. Warner has also prepared this comprehensive COVID-19 Resource Center to make it easier for clients to access important updates in a single location.
