Given the current evolution of the COVID-19 pandemic, it is essential that banks continue to lend to the real economy while acknowledging any solvency issues to ensure that problematic loans are well reflected on their balance sheets. Therefore, as part of the reactivation of its legislative and non-legislative moratorium guidance, EBA has introduced two new restrictions to ensure that support for moratoriums is limited to addressing liquidity constraints triggered by new lockdowns and that there are no operational restrictions on the continued availability of credit. The European Banking Authority (EBA) decided today to postpone the date of its guidance for legislative and non-legislative moratoriums until 30 September 2020. As EU economies are not yet fully open, this extension demonstrates the importance of continuing to support banks` lending measures in response to this exceptional situation. This extension would ensure that appropriate treatment is available for borrowers across the EU, as the COVID-19 crisis has affected EU countries in different ways and at different paces. Guidelines for Legislative and Non-Statutory Moratoria on Loan Repayments in Response to the COVID-19 Crisis – SECOND AMENDMENT These guidelines outline the criteria that legislative and non-statutory moratoriums on loan repayments must meet due to the COVID-19 crisis before June 30, 2020. The objective of these guidelines is to clarify the requirements for public and private moratoriums which, if respected, will help to avoid the classification of exposures according to the definition of forbearance or as deficiencies in the context of a non-performing restructuring. However, the EBA`s attention was drawn to a significant number of issues, both as regards the guidance on payment moratoriums and, more generally, as regards the supervisory framework. The report clarifies the implementation of the guidelines by addressing a number of interpretation issues and provides an overview of the general payment moratoriums applicable in the EU on the basis of notifications to the EBA.
The language required for the declaration can be found at the end of the CDC order [PDF]. Several legal aid agencies have created practical forms for tenants who understand the language required by the CDC. Payment moratoriums have been an effective tool to address short-term liquidity issues caused by the COVID-19 pandemic. According to the Communication on general payment moratoriums received by the EBA, the vast majority of EU banks have participated in such schemes. In addition, payment moratoriums will continue to take effect for some time, depending on the duration of payment extensions, which are on average between 6 and 12 months in Europe. The EBA guidance has helped banks to effectively manage the large volumes of requests from customers wishing to participate in these schemes. However, EBA considers that the extension of such an exemption measure is not appropriate at this stage. The practice of rescheduling loans should be done on a case-by-case basis. The COVID-19 pandemic has brought with it a significant number of policy challenges, both at EU and national level. One of the EBA`s main actions to apply the flexibility in the regulatory framework was the publication on 2 April 2020 of the guidance on legislative and non-legislative moratoria on credit repayments (EBA/GL/2020/02, GL on moratoriums). Thus, while maintaining comparable ratios, banks could also grant payment holidays to customers, whether under legislative or non-legislative moratoriums. In this context, the Guidelines specify that moratoriums on payments do not lead to a qualification of forbearance or non-performing restructuring if the measures taken are based on the applicable national law or on a sectoral or sectoral private initiative agreed and generally applied by the credit institutions concerned.
EBA shall continuously monitor the application of the moratoriums and the evolution of the credit quality of loans subject to those moratoriums. Together with the requirement for banks to document their plans to assess the likelihood of paying exposures under moratoriums, these measures will enable supervisors to take action, where appropriate, to ensure adequate recognition of losses. In addition, EBA has strengthened disclosure requirements related to the application of public moratoriums and will soon publish additional information on the application of moratoriums across the EU banking sector as part of its annual EU-wide transparency exercise. The European Banking Authority (EBA) has closely monitored the evolution of the COVID-19 pandemic and, in light of the progress made so far, will allow its guidelines on legislative and non-legislative moratoria on payments to expire in accordance with its deadline of the end of September. These guidelines, published at the beginning of the COVID-19 pandemic, have created the necessary flexibility and certainty in terms of the regulatory framework, given the significant number of measures taken by banks to support their customers in the face of exceptional containment measures. It is essential that banks continue to be able to lend and the EBA will continue to monitor the situation if necessary. EBA considers payment moratoriums as effective tools to address short-term liquidity constraints caused by the restricted or suspended activities of many businesses and individuals due to the impact of COVID-19. Recognising the crucial role that banks play in providing financing to European citizens and businesses during the current COVID-19 pandemic, EBA decided to legally extend the date of application of the guidelines by three months. In granting this extension, EBA is well aware of the trade-off on the extension, as persistent liquidity constraints may, in the current circumstances, turn into solvency issues that need to be properly assessed by banks on a case-by-case basis.
Under this order, a landlord, the owner of a residential property or any other person with the legal right to pursue an eviction or an act of possession cannot evict an affected person from a residential property in a jurisdiction to which this order applies during the period of validity of the order. EBA has already taken a significant number of steps to provide operational relief to the institution under the current supervisory framework. This includes the release on November 2 of guidelines for legislative and non-statutory moratoriums on loan repayments. April 2020, during which institutions were encouraged to provide clients with payment holidays. The regulatory treatment set out in the Guidelines will continue to apply to all payment truces granted under moratoriums on eligible payments prior to September 30, 2020, thereby avoiding the risk of cliff effects of having to abruptly reclassify existing loans at a later stage. Banks can continue to support their customers after 30 September 2020 with extended payment moratoriums, these loans should be classified on a case-by-case basis according to the usual prudential framework. The EBA Guidelines on legislative and non-legislative moratoria on loan repayments were adopted on 2. April 2020 to ensure that, while maintaining comparable ratios, banks can grant payment bans to customers to avoid automatic classification of exposures based on the definition of forbearance or defaulted exposures in the context of a distressed restructuring. This regulatory measure, triggered by the disruptions caused by the COVID-19 pandemic, recognised the crucial role of banks in supporting continued liquidity and the challenges faced by European businesses. After closely monitoring the evolution of the COVID-19 pandemic and, in particular, the impact of the second wave of COVID-19 and associated government restrictions in many EU countries, the European Banking Authority (EBA) has decided to reactivate its guidelines on legislative and non-legislative moratoriums.
This reactivation will ensure that loans that did not previously benefit from a moratorium on payments will now also be able to benefit from it. The role of banks in ensuring the continuity of the flow of credit to customers remains paramount and, with the reactivation of these guidance, the EBA recognises the exceptional circumstances of the second wave of COVID-19. The revised EBA Guidelines, which will apply until 31 March 2021, provide additional safeguards against the risk of excessive increases in losses not recognised on the bank`s balance sheet. Notice of Resignation Attestation Form and Submission Information, Executive Office of Housing and Economic Development. During the COVID-19 state of emergency, landlords who issue a notice of termination for non-payment of rent to an apartment tenant must provide the tenant with a completed form attesting (swearing) certain facts with the notice.