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Banks Blindsided as N.Y. Virus Relief Order Roils Contracts

  • Effort to help homeowners, businesses also may apply to trades
  • Law firm says banks have already faced litigation threats
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Watch: A New York directive ordering banks to help cushion the economy may unintentionally roil markets.(Source: Bloomberg)
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A New York directive ordering banks to help cushion the economy by providing temporary relief on mortgages and loans is so sweeping that it may unintentionally roil markets and pose risks to the financial system.

The executive order signed on Saturday by New York Governor Andrew Cuomo requires banks regulated by the state’s Department of Financial Services to provide 90 days of forbearance to “any person or business who has a financial hardship as a result of the COVID-19 pandemic,” and it contains a specific provision for mortgage relief. That should help homeowners and small businesses struggling to make payments as their revenue plummets.