CFPB: Credit account delinquencies ticked up some but remain at pre-pandemic levels

New delinquencies for auto loans and credit cards began to rise somewhat in the second half of 2020 but remained at or below pre-pandemic levels as of March 2021, the consumer financial protection agency said in a “special issue brief” posted Wednesday.

The Consumer Financial Protection Bureau (CFPB) issued a report last August that showed delinquencies on auto loans, student loans, mortgages, and credit cards declined from the start of the pandemic (in March 2020) through June 2020. In Wednesday’s post, it discusses some upticks against the backdrop of federal measures, including forbearances and stimulus checks.

“Additional stimulus payments of up to $1,400 per person were sent to many Americans in March and April 2021, which along with other benefits such as extended unemployment insurance may continue suppress delinquencies in the near term,” the bureau said. “Time will tell whether delinquencies begin to rise again through the summer and fall of 2021.”

The CFPB took a look at consumers’ transition to delinquency since the August report and noted that after June 2020:

  • New delinquencies for auto loan and credit card accounts began to rise gradually, although by December 2020, the share of open accounts transitioning into delinquency was lower or about the same as it had been pre-pandemic.
  • New delinquencies for student loans ticked up slightly but their rate remained “quite low.” A large share of these loans remain subject to automatic payment suspension under the CARES Act and administrative action by the Department of Education. New delinquencies began rising in April of 2020 for loans not subject to payment assistance.
  • New delinquencies on mortgages remained low from through April 2021, likely reflecting forbearances available under the CARES Act, which have since been extended through this Sept. 30 (as of the time of the post).

The agency said that while overall trends in new delinquencies generally remained similar across credit score groups, trends were more pronounced for consumers with lower credit scores.

The CFPB said a later post will focus on trends in payment assistance since June 2020.

Delinquencies on credit accounts continue to be low despite the pandemic