The Consumer Finance Protection Bureau (CFPB) has continuously studied the impact of the COVID-19 (coronavirus) pandemic on the credit of U.S. consumers. Now the agency has a new report highlighting the impact of the coronavirus on consumer credit.
CFPB Report for March – June 2020
The CFPB’s Consumer Credit Panel (CCP), studying “a nationally representative sample of approximately five million de-identified credit records maintained by one of the three nationwide consumer reporting agencies,” highlights a drop in delinquencies amid a historic rise in unemployment.
The new report focuses on mortgage, loans, and credit card accounts from March through June 2020. The report also notes that its outcomes may reflect the influence of payment assistance provided through the CARES Act.
New CFPB Consumer Credit Report at a Glance
Here are some of the major takeaways from the CFPB’s most recent report on the impact of the coronavirus on consumer credit:
- New credit delinquencies fell in the period between March and June 2020
- There was a sharp increase in the total number of credit accounts reporting zero payment, due to coronavirus financial hardship programs
- The consumers most likely to be impacted by credit limit reductions or account closures were those with higher credit scores or inactive accounts
- Average credit card balances declined by 10% between March and June 2020.
Browse the CFPB Consumer Credit Report Data
Consumer Finances Are Proving Resilient
The biggest news concerning credit cards is that the overall impact of account closures and credit limit reductions appears to be smaller in scope than previously believed. Given that the report covers the period through June only, however, recent stories of banks’ lower credit limits may have a significant impact on future reports.
The role of coronavirus-related payment assistance is also noteworthy. Nearly all credit card issuers, banks, and other lenders are providing some form of payment relief for those struggling with monthly payments.
The efficacy of these assistance and hardship programs are apparent in the report and play a significant role in the decline of delinquencies in the period. It will be interesting to see how the delinquency rate in the March through June 2020 CFPB report correlates with findings from later in the summer. New enrollment in forbearance programs has declined since the initial spike, at least according to anecdotal information from major issuers.
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