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California DFPI Issues Guidance on Borrowers Affected by Storms

The California Department of Financial Protection and Innovation (DFPI) has issued guidance directed to financial institutions, lenders, and mortgage servicers in California whose customers may be experiencing financial hardship as a result of recent severe winter storms, flooding, and landslides.

The department recognizes the serious impact to borrowers in communities affected by these natural disasters and encourages lenders and servicers to work with these customers to meet their financial needs.

The commissioner encourages financial institutions, lenders, and servicers to work constructively with their customers and propose solutions to meet their lending needs as the recovery continues. Such solutions may include offering payment accommodations, such as deferrals or extensions, and loan modifications to the rate or term. Prudent efforts to modify or restructure the terms of loans will not be criticized by examiners. This guidance does not modify any existing law or regulation.

Furthermore, the commissioner acknowledges that some licensees may experience an increase in delinquent or nonperforming loans and troubled debt restructures as a result of the financial impact to borrowers caused by the severe storm activity. The commissioner will consider such increases in adversely classified assets within the context of the state of emergency, and supervisory responses will be measured and appropriate. The commissioner supports and will not criticize efforts to accommodate customers in a safe and sound manner.

On January 23 and February 4, 2024, Governor Gavin Newsom proclaimed a state of emergency in parts of California as a result of the winter storms. These storms caused flooding, closure and damage to roadways, power outages, damage to structures, and mandatory evacuations in certain counties.

Access the ‘Compliance Hotline’
Your League-member benefits include the Compliance Hotline — providing exclusive access to dedicated compliance experts:

Using the above phone number and email address, you can gain access to a knowledgeable team that’s ready to address all your credit union’s compliance inquiries — promptly and efficiently. With the Compliance Hotline, you can proactively respond to impromptu questions and issues by getting clarity and insight on technical topics that normally slow you down. We want to help you unlock the full potential of your League membership by leveraging the resources and support you need to navigate the complex world of compliance effortlessly. We’re ALWAYS just a phone call or email away!

Additionally, other League-member compliance resources include:

  • ViClarity
  • CU PolicyPro
  • ComplySight
  • InfoSight
  • CU Store
  • Record Retention Guide
  • GRC Technology Solutions

For more information, email Lisa Quaranta.

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