Note to Banks and Other Financial Institutions Clarifying Circular 115

The BRH gives four clarifications on circular 115 of March 19, 2020. First, institutions apply the moratorium only to clients who say they want it; it is not mandatory. Second, the moratorium shifts the client's credit status in time over April 1 to June 30, 2020: the debtor pays only the interest due over those three months, then resumes monthly payments of principal and interest with the same credit classification as at the end of March 2020, so a client classified Watch at March 31, 2020 shows that classification from July 1, 2020.

Third, the moratorium automatically extends the loan by three months, and a debtor who wants to keep the original term can negotiate a restructuring. Fourth, from April to June 2020 institutions must not charge late fees to clients, whether or not they chose the moratorium.