The federal banking agencies, for example, made clear that lenders and servicers should adhere to consumer protection requirements, including fair lending laws, and provide the opportunity for all borrowers to benefit from these arrangements.8 The federal banking agencies have confirmed that in the context of the Community Reinvestment Act, they willl favorably consider retail banking services and retail lending activities in a financial institution's assessment areas that are responsive to the needs of low- and moderate-income individuals, small businesses, and small farms affected by COVID-19 consistent with safe and sound banking practices.9 This includes, for example, waiving certain fees, easing restrictions on check-cashing, expanding availability of credit, providing alternative service options, and offering alternative payment options. Prudent efforts to modify terms on new or existing loans will receive favorable CRA consideration. In addition, financial institutions will receive CRA consideration for community development activities, e.g., activities that help to revitalize or stabilize low- or moderate-income geographies such as support for food services and digital access, as well as lending, investment and service activities that support health care and small businesses, particularly for low- and moderate-income individuals or communities. In terms of supervisory focus, the Fed has prioritized monitoring to evaluate the impact on consumers to ensure that banks work in good faith with consumers, apply fair treatment and mitigate consumer harm. We are monitoring consumer loan deferrals and modifications and corresponding servicing activities to ensure banks' responsiveness.

On the regulatory side, the Fed has taken a number of steps to encourage banks to use their balance sheet to support borrowers. For community banks, for example, the federal banking agencies are implementing the part of the CARES Act to lower the community bank leverage ratio.3 4 In terms of liquidity provision, the Fed has actively encouraged banks to use the discount window to help meet the demand for credit from household and businesses.5 To make this more attractive, the Fed has lowered the borrowing rate, extended the term of these loans, and actively signaled support for discount window use. The Fed also implemented the Paycheck Protection Program Liquidity Facility (PPPLF).6 This facility is designed to support the effectiveness of the Paycheck Protection Program, created by the CARES Act and implemented by the Small Business Administration (SBA), by extending credit to financial institutions that make PPP loans. Supplying financial institutions with additional liquidity will help increase their capacity to make PPP loans. In term of eligibility for participation in the PPPLF, the Federal Reserve is working to expand eligibility to PPP lenders that are not depository institutions in the near future.7 Consumer Protection https://www.newyorkfed.org/newsevents/speeches/2020/sti200424  1/2  Panel Remarks: The Fed and Main Street during the Coronavirus Pandemic - FEDERAL RESERVE BANK of NEW YORK  The Fed has emphasized the importance of consumer protection during this period.