An illustration of the new coronavirus that causes the disease COVID-19. Image courtesy of the Centers for Disease Control.

As Massachusetts banks and credit unions have started to roll out programs to support individual and business customers affected by the coronavirus outbreak, the state Division of Banks has promised its examiners won’t criticize “safe and sound” steps lenders take to help keep borrowers afloat.

“The Division encourages financial institutions to work with affected customers and communities,” the DOB said in a memo released March 16. “The Division recognizes that such efforts serve the long-term interests of communities and the financial system when conducted with appropriate management oversight and consistent with safe and sound banking practices and applicable laws.”

Some banks have already taken steps to help both retail and business customers. Berkshire Bank earlier this week unveiled a series of programs to help customers, including options for small businesses to forbear loans. Connecticut-based Webster Bank, which has branches throughout the Greater Boston area, also established several programs, including an expedited process for Small Business Administration loans.

“We recognize that the emergence of COVID-19, and the dramatic steps we all must take to curtail its spread, will create financial and other challenges for our customers and communities,” John R. Ciulla, Webster president and CEO, said in a statement. “Consistent with our long history of supporting our customers in times of need, Webster is committed to providing financial flexibility to the individuals, small businesses and corporations that we serve.”

For consumers, Braintree-based Liberty Bay Credit Union has created an emergency loan fund for members affected by the pandemic. Customers can apply for a 12-month unsecured personal loan up to $2,500. The first payment would be due up to 60 days after closing on the loan. Interest rates would be lower than the typical rate for unsecured loans.

The DOB said efforts to assist customers may include, but are not limited to:

• Waiving certain fees, such as ATM fees for customers and non-customers, overdraft fees, late payment fees on credit cards and other loans and early withdrawal penalties on time deposits.
• Increasing ATM daily cash withdrawal limits.
• Easing restrictions on cashing out-of-state and non-customer checks.
• Increasing credit card limits for creditworthy borrowers.
• Offering payment accommodations, such as allowing borrowers to defer or skip some payments or extending the payment due date, which would avoid delinquencies and negative credit bureau reporting caused by COVID-19-related disruptions.

The DOB memo also instructed financial institutions to modify loans “based on the facts and circumstances of each borrower and loan.” The DOB added that institutions would not be subject to criticism from examiners when they make prudent efforts to modify the terms on existing loans.

Examiners will also be flexible when evaluating loans that, from an accounting standpoint, would be considered “troubled debt restructuring” because the borrower is experiencing a temporary liquidity shortage due to COVID-19, according to the memo.

The DOB said financial institutions should work with regulators regarding other actions that could effectively manage or mitigate any adverse impact due to COVID-19.

“The Division recognizes there may be other accommodations that could assist customers and communities in responding to challenges from COVID-19,” the DOB said. “The Division supports and will not criticize efforts to accommodate customers in a safe and sound manner.”