New York Issues Series of Executive Orders Providing Relief to Borrowers Impacted by COVID-19
On March 7, 2020, Governor Andrew Cuomo issued Executive Order 202 declaring a state of emergency for the entire State of New York as a result of the COVID-19 pandemic. Since that time, the Governor has issued a series of Executive Orders aimed at assisting New Yorkers. Included in this series were Executive Orders 202.7 (issued March 19, 2020), 202.8 (issued March 20, 2020), and 202.9 (issued March 21, 2020). In order to implement Executive Order 202.9, the New York Department of Financial Services (NYDFS) issued emergency regulations under New Part 119 to Title 3 of the Official Compilation of Codes, Rules, and Regulations of the State of New York (NYCRR) on March 24, 2020.
Each of these Executive Orders and the emergency regulations affects banks, the mortgage banking industry, and other providers of financial services. We have summarized the pertinent parts of each Executive Order and the emergency regulations below.
As of March 19, 2020, New York allows notarizations to be completed via audio-video technology through April 18, 2020 subject to the requirements outlined below:
- The person seeking the notary’s services, if not personally known to the notary, must present valid photo ID to the notary during the video conference, not merely transmit it prior to or after;
- The video conference must allow for direct interaction between the person and the notary (e.g. no pre-recorded videos of the person signing);
- The person must affirmatively represent that he or she is physically situated in the State of New York;
- The person must transmit by fax or electronic means a legible copy of the signed document directly to the notary on the same date it was signed;
- The notary may notarize the transmitted copy of the document and transmit the same back to the person; and
- The notary may repeat the notarization of the original signed document as of the date of execution provided the notary receives such original signed document together with the electronically notarized copy within thirty days after the date of execution.
As of March 20, 2020, there is a 90-day foreclosure and eviction moratorium in New York. Additionally, all commencement, service, and filing deadlines are all tolled until April 19, 2020.
As of March 21, 2020, subdivision two (2) of Section 39 of the New York Banking Law is modified to provide the following:
- Through April 20, 2020, it shall be deemed an unsafe or unsound business practice for a bank subject to the jurisdiction of the New York Department of Financial Services (NYDFS) to not grant a 90-day forbearance to a person or business who has a financial hardship as a result of the COVID-19 pandemic.
- Through April 20, 2020, the NYDFS must ensure under reasonable and prudent circumstances that licensed and regulated entities provide to any consumer in New York a mortgage payment forbearance for a person or entity facing financial hardship as a result of the COVID-19 pandemic. The NYDFS is required to adopt emergency regulations regarding this issue and must make them widely available for consumers.
- The NYDFS is empowered to promulgate emergency regulations to direct that, through April 20, 2020, fees for the use of automated teller machines (ATMs), overdraft fees, and credit card late fees may be restricted or modified in accordance with the NYDFS’s regulation of licensed or regulated entities taking into account the financial impact on the New York consumer, the safety and soundness of the licensed or regulated entity, and any applicable federal requirements.
In order to implement Executive Order 202.9, the NYDFS issued emergency regulations under New Part 119 to Title 3 of the NYCRR on March 24, 2020. Expanding upon the requirements set forth in the Executive Order, the emergency regulations state that all regulated institutions must adhere to the following:
- For a 90-day period, which may be extended, New York regulated institutions are required to, in addition to adhering to the servicing requirements of Part 419, (i) make applications for forbearance of any payment due on a residential mortgage of a property located in New York, widely available to any individual who resides in New York and who demonstrates financial hardship as a result of the COVID-19 pandemic; and (ii) subject to the safety and soundness requirements of the regulated institution, grant such forbearance for a period of 90-days to any such individual.
This requirement, however, does not apply to mortgage loans made, insured, or securitized by any agency or instrumentality of the United States, any Government Sponsored Enterprise, or a Federal Home Loan Bank, or the rights and obligations of any lender, issuer, servicer, or trustee of such obligations, including servicers for Ginnie Mae.
- For a 90-day period, which may be extended, New York regulated banking organizations will, to any individual who can demonstrate financial hardship from COVID-19, subject to the safety and soundness requirements of the regulated banking organization: (1) Eliminate fees charged for the use of ATMs that are owned or operated by the regulated banking organization; (2) Eliminate any overdraft fees; and (3) Eliminate any credit card late payment fees. Institutions are also encouraged, consistent with safe and sound banking practices, to take reasonable and prudent actions to assist individuals demonstrating financial hardship.
- By April 7, 2020, all regulated institutions are required to email, publish on their website, mass mail, or otherwise similarly broadly communicate to customers how to apply for COVID-19 relief and provide their contact information.
The emergency regulations also set forth requirements for regulated institutions pertaining to, among other things:
- The criteria developed by regulated institutions for individuals to qualify for COVID-19 relief; and
- Necessary steps for the processing of applications for COVID-19 relief, including:
- Requests for COVID-19 relief must be processed and responded to no later than ten (10) business days after the regulated institution receives all information it reasonably requires to process the application.
- Procedures shall be developed and implemented for the expedited processing of applications for COVID-19 relief for any individual who reasonably establishes an exigent circumstance and requests the expedited processing of the individual’s application.
- All determinations on applications for COVID-19 relief shall be communicated to the applicant in writing and shall state whether the application was granted and what, if anything, the applicant needs to do to secure the relief or, if the application was denied, the reason it was denied and a statement that the applicant may file a complaint with the New York State Department of Financial Services at 1-800-342-3736 or dfs.ny.gov if the applicant believes the application was wrongly denied.
If you have questions, reach out to one of the authors of this alert or another member of the firm’s Consumer Financial Services team, or visit our COVID-19 Resource Center.