There was an overall drop in delinquency rates among mortgages, credit cards, auto loans, and student loans during the first few months of the coronavirus pandemic, according to data released yesterday by the Consumer Financial Protection Bureau, which also indicated that individuals were not using their credit cards to keep themselves financially afloat.
Analyzing millions of accounts across all four financial products, the CFPB’s data paints a picture of consumers who have performed significantly better than they did during the Great Recession a decade ago, largely due to the intervention at the state and federal level to institute forbearance plans and offer additional financial support in the form of economic stimulus payments. That support “counteracted” the income and employment shocks felt by millions of individuals who likely would have fallen behind on the debt payments.
The data supports a growing body of analytical and empirical evidence that shows consumers have largely been able to keep their financial heads above water so far, and, as long as the number of confirmed coronavirus cases across the country continues to decline, will be able to continue doing so.
Regardless of whether the underlying loan was current or already delinquent when the pandemic struck the country in mid-March, the delinquency rate on the four types of credit analyzed by the CFPB improved during the next three months, which is doubly interesting not only because of the pandemic, but also because the rates were rising in the months prior to the pandemic striking the country.
There were large spikes in the number of individuals who reported receiving some form of financial assistance, such as stimulus payments from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
