TRENTON, NJ - Senator Paul Sarlo, of Wood-Ridge, NJ, today urged New Jersey banks to grant a two-month “holiday” on payments for mortgage payments and lines of credit to restaurants and bars that have shut down or are experiencing sharp declines in revenue due to the COVID-19 crisis. The initiative comes in response to an NJ Labor Department report that 15,000 people, predominantly from the restaurant and bar industry, filed new unemployment claims this past Monday.
Sarlo, the chairman of the Senate Budget and Appropriations Committee, called on the New Jersey Bankers Association and other state-based banks to work together to adopt a uniform policy to help relieve the severe financial strain that threatens their ability to reopen and stay in business.
"Both institutions have already reached out to begin an immediate dialog," he said Wednesday night.
“Closing restaurants and bars is in the best interest of the public’s health and safety, but we must recognize that the restaurant and bar industry is one of our state’s largest employers,” said Senator Sarlo the Bergen County legislator who also serves as the Mayor of Wood-Ridge. “If these restaurants and bars go bankrupt and don’t reopen when conditions allow, thousands of our residents will be permanently unemployed.”
Sarlo said the Bankers Association and other New Jersey banks have the opportunity to act proactively to prevent business closures and job losses.
“I urge the banks in New Jersey to develop a uniform policy to allow for a two-month holiday on payments for mortgages and lines of credit that are usually made in the course of doing business,” said Senator Sarlo. “A payment holiday is a smart move for banks, because getting paid two months late is better than never getting paid if these restaurants and bars go bankrupt.”
Sarlo said he also wants to initiate a discussion with insurance companies on the adequacy of “business interruption” insurance.
“Many restaurants and bars don’t have insurance coverage for business interruptions and most that do have policies don’t cover public health emergencies,” said Sarlo, saying he wants to begin talks with the Insurance Council of New Jersey, The New Jersey Restaurant Association and the New Jersey Department of Banking and Insurance to find ways to provide coverage for a business that is lost during this health emergency.
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