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CFPB REPORT:
EFFECTS OF
COVID-19 ON
MORTGAGE
LOANS, OTHER
DEBT
e Consumer Financial Protection
Bureau (Bureau) this week issued a report
examining the effects of the COVID-19
pandemic on consumer credit through June.
e report focused on mortgage, student and
auto loans, and credit card accounts since
March.
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.
It noted that outcomes may reflect payment
assistance provided to American consumers
through the CARES Act.
Using the Bureau's Consumer Credit
Panel (CCP), a nationally representative
sample of approximately five million de-
identified credit records maintained by
one of the three nationwide consumer
reporting agencies, the report shows that
new delinquencies fell between March and
June. e report also found increases in
payment assistance from creditors and lenders
to borrowers. Student loan and first-lien
mortgage accounts had the largest increase in
assistance in terms of magnitude but increases
in assistance on auto loan and credit card
accounts were substantial given that there
was effectively zero assistance reported for
consumers prior to the COVID-19 pandemic.
Assistance appeared to be concentrated
among borrowers residing in areas that were
more severely affected by the COVID-19
pandemic and the associated shocks to
employment.
e report also found that financial
institutions reduced access to credit card
debt both by closing existing lines of credit
and by halting credit limit increases on open
accounts. However, these effects were small in
magnitude. Both account closings and credit
line reductions primarily affected borrowers
with high credit scores, and many of the
account closings were on cards that were
closed for inactivity.
Credit card balances also fell substantially
at the start of the COVID-19 pandemic, then
continued a steady decline through to June
2020. e decrease in credit card balances
were consistent across groups when broken
down by credit score and various demographic
factors.
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