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Banks, credit unions offer to defer loan payments

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Valley Strong Credit Union headquarters building 11500 Bolthouse Drive.

Local and national financial institutions said Thursday they stand ready to defer debt payments and possibly restructure loans for borrowers hurt by the new coronavirus.

Already some service fees are being waived in recognition of the financial damage the pandemic is causing businesses and individuals. But bank and credit union managers said relatively few borrowers have asked for special accommodations as the virus begins to slow economic performance.

Meanwhile, concerns that panicked customers would make large cash withdrawals generally have not been realized, several local managers said.

"We have seen zero panic with our customer base," said Geraud Smith, president and CEO of Valley Republic Bank.

The Bakersfield-based bank said it has closed some of its lobbies out of a desire to limit the virus's spread. But its drive-thrus remain open and, inexplicably, cash deposits have increased, Smith said.

While no debt payments have had to be deferred so far, he said, the bank expects to handle such requests on a case-by-case basis.

"We haven’t seen any deviation in our business to this point," he said.

Valley Strong Credit Union characterized its situation as "very fluid," saying it had begun limiting the number of customers inside its branches at any given time. The Bakersfield-based institution on Wednesday began opening its offices half an hour earlier than normal, at 8:30 a.m., in order to accommodate senior citizens.

Senior Vice President Michael George urged Valley Strong members to call the credit union at 661-833-7505 if they anticipate having trouble meeting a debt payment.

“Reach out to us," he said. "We can always defer payments. We can make loan modifications in order to accommodate each individual situation.”

George further advised people to avoid withdrawing or carrying large amounts of cash. Customers should instead rely on debit cards and ATM machines, he added.

The president and CEO of Bakersfield-based Strata Credit Union, Brandon Ivie, said the institution is allowing car loan customers and other borrowers to defer payment under its skip-a-payment program, which normally sees its greatest use during the holiday shopping season.

Payment deferrals can generally be extended beyond a single month if necessary, he said.

But because mortgages and second mortgages fall under special regulatory guidelines, and cannot be deferred as easily, the credit union is considering how to ease pressures on homeowners who may be facing financial challenges, Ivie said.

For customers who may want to withdraw large amounts of cash, Strata is eliminating cashier's check fees in order to encourage use of a safer alternative that also provides quick access to unusually big sums, Ivie said.

Bank of America issued a news release Thursday reassuring its consumer and small-business clients they can request fee refunds on overdrafts, non-sufficient funds and monthly maintenance. It said no negative reports will be sent to credit bureaus regarding clients who have stayed up to date with payments.

Also available, the bank said, are payment deferrals for mortgages, home equity lines of credit, consumer and small-business credit cards, auto loans and small business loans. In many cases, refunds can be given for late fees, it said, and deferred payments can be added to the end of a loan.

"We have also paused foreclosure sales, evictions and repossessions," Bank of America said in the news release.

Other local and national financial institutions did not immediately respond to requests for comment.

Editor's note: This story has been corrected to state Bank of America may refund late fees.

Follow John Cox on Twitter: @TheThirdGraf.

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