Banks across Arkansas are following federal recommendations and providing borrowers with options to defer loan payments during the coronavirus pandemic.
The initiative gives business owners and consumers squeezed by economic pressures brought on by the virus an option for economic relief over the next six months.
“All banks are working with both commercial and consumer customers to help them through this difficult time,” said Rob Robinson on behalf of the Arkansas Bankers Association, a trade group that represents banks in the state. “Loan modifications are one of the many tools we are utilizing to help our customers.”
Economic disruptions from the virus led regulators on Sunday to issue guidelines to the nation’s financial institutions, asking them to consider granting loan-payment relief for up to six months to borrowers suffering distress.
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The collaborative effort includes the board of governors of the Federal Reserve System, the Conference of State Bank Supervisors, the Federal Deposit Insurance Corp. and the comptroller of the currency, among others.
Regulators “view prudent loan modification programs offered to financial institution customers affected by COVID-19 as positive and proactive actions that can manage or mitigate adverse impacts on borrowers, and lead to improved loan performance and reduced credit risk,” the agencies said in a joint statement.
Banks in Arkansas are being proactive, and retaining flexibility to respond to individual needs, in helping restructure loans. Customers “may be eligible for accommodations on mortgage loans and personal loans — things like auto loans and home equity loans,” said Jason Kincy, marketing director at Arvest Bank.
Simmons Bank is concentrating on granting immediate relief to get customers through the crisis, according to Steve Wade, chief credit officer of Simmons First National Corp.
“Our focus is generally on short-term payment relief, per the regulatory guidelines and our own initiative to help customers in need where circumstances warrant,” Wade said.
Bank OZK and Home BancShares Inc., owners of Centennial Bank, also have ramped up similar efforts to help customers.
“We are providing 90-day deferments and we will review the situation at that time to determine on a case-by-case basis whether another 90-day deferment is appropriate,” said Kevin Hester, chief loan officer at Centennial. “This process has worked very well for us in previous disasters, primarily caused by hurricanes.”
In a banking industry coverage note, Stephens Inc.’s research team praised the move by regulators. “This news is positive for the sector as it provides time for banks to manage what could be a temporary…