The Consumer Financial Protection Bureau (CFPB) issued a report Monday examining the early effects of the COVID-19 pandemic on consumer credit. The report found that consumers have not experienced significant increases in delinquency or other negative credit outcomes as reported in credit record data following the onset of the COVID-19 pandemic in the United States. 

This is in spite of the sharp increases in unemployment resulting from the pandemic. 

The report focused on mortgage, student and auto loans and credit card accounts from March 2020 to June 2020, and notes 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 of 2020. 

The 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.

The 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.  The decrease in credit card balances were consistent across groups when broken down by credit score and various demographic factors.