Cuomo Issues Executive Order Banks To Postpone Mortgage Payments
Governor Andrew Cuomo issued an executive order on Saturday urging banks to postpone mortgage payments by 90 days for homeowners in dire financial straits due to the coronavirus pandemic.
The ordinance states, “It is considered unsafe and unsafe business practice” for government-regulated banks not to give mortgage indulgence to strained borrowers for 90 days. It calls on the Superintendent of the Department of Financial Services to put in place “emergency regulations” to ensure that banks make requests for the service generally available to consumers.
The mortgage relief is aimed at homeowners who are losing their jobs or are in financial need due to the coronavirus. It does not apply to commercial loans secured by real estate.
Cuomo issued the executive order after his senior adviser Melissa DeRosa told reporters that “some people were deviating from the measure” announced by the governor on Thursday. A memo released hours after the announcement by the Department of Financial Services showed that deferring mortgages was a non-compulsory proposal that casts doubt on Cuomo’s ability to dictate banks’ lending practices via press release.
But on Saturday morning, DeRosa said the Department of Financial Services had reached an agreement with the banks. The heads of the commercial banks had been negotiating directly with Cuomo’s office since the beginning of the week, according to sources.
“[Department of Financial Services] actually made an agreement with the banks. We try to do this in such a way that we don’t dictate anything to them, ”DeRosa said at a press conference in Albany.
In fact, the measure does not specify how the government will ensure that banks comply with the order. However, the finding of an “unsafe and unsafe business practice” could result in fines from the regulator who oversees insurers and nationally recognized banks.
As for tenants, many may face challenges paying rent on April 1st. To slow the spread of the virus, Cuomo has ordered that all non-essential workers stay at home – many unemployed or without pay.
Landlord associations say they need relief from the government too, in the form of tax breaks, direct subsidies for tenants or a mandatory deferral of their loans. Tenant groups called for rents to be suspended during the crisis, but have so far been left with a full-blown rent strike. Senator Michael Gianaris from Queens proposed a bill to waive 90 days rent in the face of the coronavirus.
The executive order also states that the superintendent can draft an order to limit the fees for using ATMs, overdrafts and late credit card payments during the crisis. But it doesn’t stop calling for the superintendent of the department, Linda Lacewell.
Lacewell was appointed to the division by Cuomo last June. Before that, she was the governor’s chief of staff, having been Cuomo’s special adviser before he became governor.