Yesterday the Consumer Financial Protection Bureau (Bureau) issued a report examining the early effects of the COVID-19 pandemic on consumer credit. Based on credit record data, the Bureau’s research found that consumers have not experienced significant increases in delinquency or other negative credit outcomes since the onset of the COVID-19 pandemic. The report focuses on mortgage, student and auto loans, and credit card accounts from March 2020 to June 2020.
According to the report,
Clearly, the CARES Act is largely behind these results. The report notes that the Act generally requires furnishers to report as current certain credit obligations for which they make payment accommodations to consumers affected by COVID-19. Since consumers receiving assistance can maintain a current account status rather than go, delinquent, the expectation is that there will be fewer month-to-month transitions into delinquency than would have been the case absent the CARES Act provisions. This is especially true for student loan accounts, for which the CARES Act automatically suspended payments and mandated furnishing requirements that apply to more than two-thirds of the market from March through September 30, 2020. On August 8, President Trump directed the Secretary to continue to suspend loan payments, stop collections, and waive interest on ED-held student loans until Dec. 31, 2020.
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