 TITLE: Consumer Delinquencies Slow During Pandemic CONTENT: Delinquencies May Rise as Pandemic Aid Expires\n----------------------------------------------\nWhile it's impossible to know for sure, the $2 trillion CARES Act signed into law in March likely contributed to the recent decline in delinquency rates. This economic stimulus package included temporary financial assistance to U.S. consumers, among other things. A $1,200 one-time payment was distributed to many U.S. adults, and expanded unemployment benefits included an extra $600 per week for unemployed workers until this benefit expired in July. Executive action to extend unemployment payment increases was signed August 8, but payouts will be reduced.\nThe law also provided guidance for lenders on borrower accommodations for those that had been impacted by the pandemic. Included in this was a mandate that lenders and servicers of federally backed mortgages allow those impacted by COVID-19 to place their loans in forbearance. Additionally, most federal student loan collection was halted and the interim interest rate set to zero.\nThese mandates paused repayment for many borrowers (some automatically and some through an opt-in forbearance), offering much-needed breathing room to consumers managing their financial situation.\nAny repayment paused through the CARES Act also required that lenders report the accounts as current to the credit bureaus, as long as the account was up to date at the time the accommodation was made. This is likely contributing to the decline of delinquencies, as when a consumer's repayment is \"paused,\" they cannot become past due.\nBetween the supplemental cash from the stimulus payments and unemployment benefits, and the suspension (or option to suspend) some repayment, many consumers have avoided falling behind on debt—at least for now—and this could be driving the reduction in delinquencies.\nIt's important to remember that this data only represents a snapshot of how consumers are doing, and as the pandemic continues to impact local economies, and as aspects of the stimulus expire or are reduced, delinquencies throughout the U.S. could change. We will continue to monitor the data and publish relevant insights as conditions change in the coming months. END