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IBANYS Fights To Constrain Wide-Reaching Forbearance Legislation
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Also Working On Reforms To COVID-19 Relief Before Congress
he 2020 New York State legislative session has been perhaps the most unusual since the New York State Constitution was adopted by the Convention of Representatives in April 1777. During late March and early April, as the COVID-19 pandemic was peaking in New York State, the Legislature met to enact the 2020-21 state budget – and it was a very different type of plan, with great uncertainty as to how the state would address an enormous deficit including significant new gaps caused by the pandemic.
Governor Andrew Cuomo
It gave unprecedented authority to Governor Andrew Cuomo and his budget director to make adjustments as additional information (or funding) became available – including whether federal assistance to state and local governments might be provided by Congress in any of the emergency relief and recovery packages. Once the budget was approved, the legislature left
6 | Banking New York | Issue Three 2020
Albany and did not reconvene until the closing days of May. Subsequent legislative business took place during infrequent sessions, for the most part conducted remotely. When the legislature did reconvene, it enacted (and the governor subsequently signed) residential mortgage foreclosure legislation – and, eventually, a Chapter Amendment that modified the bill (now Chapters 112 and 126 of the Laws of 2020.) The initiative is targeted only at state-chartered banks; federally chartered banks are not impacted. IBANYS issued a strong “Memo in Opposition” to the original legislation, and continued to work with the legislature, governor’s office and NYS Department of Financial Services (DFS), led by Superintent Linda Lacewell, throughout the process that eventually resulted in the Chapter Amendment. · Mortgages currently receiving forbearance under Linda Lacewell the Governor’s Executive Order 202.9, at the time of such forbearance, shall be considered as part of the requirement to provide forbearance under the new statute. · At the end of the 180 days of forbearance provided, the borrower has an option to extend the forbearance for a second 180-day period if still in financial distress, as provided in the Chapter Amendment.
