COVID-19: Household Debt During the Pandemic

Changes from December 3, 2020 to May 6, 2021

This page shows textual changes in the document between the two versions indicated in the dates above. Textual matter removed in the later version is indicated with ~~red strikethrough~~ and textual matter added in the later version is indicated with blue.

COVID-19: Household Debt During the
~~December 3, 2020~~May 6, 2021
Pandemic
Cheryl R. Cooper,
The The ~~Coronavirus Disease 2019 (COVID-19)~~COVID-19 pandemic has had a large and persistent economic pandemic has had a large and persistent economic
~~Coordinator~~
impact across the United impact across the United Coordinator States. Fear of infection, social distancing, and stay-at-home orders States. Fear of infection, social distancing, and stay-at-home orders
prompted business closures Analyst in Financial Analyst in Financial
~~prompted business closures~~ and a severe decline in demand for travel, accommodations, and a severe decline in demand for travel, accommodations,
~~Economics~~
restaurants, and entertainment, restaurants, and entertainment, Economics among other industries. This led to a significant reduction in among other industries. This led to a significant reduction in

employment and a loss of income in employment and a loss of income in many U.S. households. Unemployment rose rapidly to a many U.S. households. Unemployment rose rapidly to a
~~Maura Mullins~~
peak at 14.7% in April peak at 14.7% in April 2020 and has Maura Mullins ~~and has~~ since fallen to 6.since fallen to 6.90% in % in ~~October~~March 2021. Consequently, many Americans . Consequently, many Americans
~~Research Librarian~~
have lost income and faced have lost income and faced Senior Research Librarian financial hardship. Survey results suggest that since March 2020, financial hardship. Survey results suggest that since March 2020,

about half of all U.S. adults live about half of all U.S. adults live in a household that has lost some employment income. in a household that has lost some employment income.
Lida R. Weinstock
During During ~~the second and third quarters of~~ 2020, different types of consumer debt—consisting of 2020, different types of consumer debt—consisting of
~~Analyst in Macroeconomic~~
mortgages, credit cards, auto loans, mortgages, credit cards, auto loans, Analyst in Macroeconomic and student loans—have exhibited different patterns during and student loans—have exhibited different patterns during
~~Policy~~
the COVID-19the COVID-19 pandemic. Notably, pandemic. Notably, Policy credit card balances declined sharply in the second quarter by credit card balances declined sharply in the second quarter by

about $76 billion, the largest about $76 billion, the largest quarterly decline on record. Mortgage debt increased, and other quarterly decline on record. Mortgage debt increased, and other

household debt remained household debt remained relatively flat. relatively flat.
In addition, during In addition, during ~~the second and third quarters of~~ 2020, the percentage of delinquent loans declined in most consumer debt 2020, the percentage of delinquent loans declined in most consumer debt
marketsmarkets . This pattern differs greatly from that of past recessions, such as the 2007-2009 Great Recession. Some of this . This pattern differs greatly from that of past recessions, such as the 2007-2009 Great Recession. Some of this
decline is due to consumers entering into decline is due to consumers entering into loan forbearance agreements when they are having trouble repaying their loans. agreements when they are having trouble repaying their loans.
Loan forbearance agreements allow borrowers to reduce or suspend payments for a short period of time, providing extended Loan forbearance agreements allow borrowers to reduce or suspend payments for a short period of time, providing extended
time for consumers to become current on their payments. These agreements do not forgive unpaid loan payments. Instead, time for consumers to become current on their payments. These agreements do not forgive unpaid loan payments. Instead,
borrowers must repay the amounts owed, and they typically enter into agreements that allow for repayment over an extended borrowers must repay the amounts owed, and they typically enter into agreements that allow for repayment over an extended
period of time. period of time.
Policy responses to the economic impacts of the COVID-19 pandemic have likely prevented many consumers from falling Policy responses to the economic impacts of the COVID-19 pandemic have likely prevented many consumers from falling
delinquent on their loan payments. Part of the congressional response was the Coronavirus Aid, Relief, and Economic delinquent on their loan payments. Part of the congressional response was the Coronavirus Aid, Relief, and Economic
Security (CARES) Act (P.L. 116-136), signed into law on March 27, 2020. The CARES Act established consumer rights to Security (CARES) Act (P.L. 116-136), signed into law on March 27, 2020. The CARES Act established consumer rights to
be granted forbearance for many types of mortgages (Section 4022) and for most federal student loans (Section 3513). The be granted forbearance for many types of mortgages (Section 4022) and for most federal student loans (Section 3513). The
CARES Act’s consumer protections, as well as other financial institution loan forbearance programs, likely helped avoid CARES Act’s consumer protections, as well as other financial institution loan forbearance programs, likely helped avoid
sharp increases in loan delinquencies. sharp increases in loan delinquencies. ~~The CARES Act also provided fiscal~~ Fiscal relief, including direct income support, relief, including direct income support, ~~which~~
was likely another important factor making it easier for consumers to pay their existing loan obligations. was likely another important factor making it easier for consumers to pay their existing loan obligations. ~~These actions~~
In addition to the CARES Act, Congress enacted other legislation to respond to the COVID-19 pandemic, including provisions in the FY2021 Consolidated Appropriations Act (CAA; P.L. 116-260) and the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2). Fiscal relief provisions in these laws included enhanced unemployment insurance and relief checks phased out for higher-income taxpayers. included enhanced unemployment insurance and relief checks phased out for higher-income taxpayers.
Given the uncertain trajectory of future COVID-19 outbreaks and their economic impacts, whether these consumer debt Given the uncertain trajectory of future COVID-19 outbreaks and their economic impacts, whether these consumer debt
usage and delinquency patterns will continue is unclear. Future public policy may be able to influence the course of the usage and delinquency patterns will continue is unclear. Future public policy may be able to influence the course of the
economic recoveryeconomic recovery in household debt markets, which could include extending loan forbearance programs, additional fiscal relief, or other policy , which could include extending loan forbearance programs, additional fiscal relief, or other policy
~~options. Congress is currently debating whether COVID-19 pandemic relief provisions should be extended or whether the~~
~~cost of these proposals outweigh their benefits. Active legislation that would modify, extend, or create new economic relief~~
~~programs includes the Heroes Act (first version: H.R. 6800; second version: H.R. 925) in the House, and the American~~
~~Workers, Families, and Employers Assistance Act (S. 4318) in the Senate.~~
options. In addition, consumers’ future access to credit markets may become another In addition, consumers’ future access to credit markets may become another ~~ris k~~risk factor. The congressional response to the factor. The congressional response to the
COVID-19COVID-19 pandemic has primarily focused on helping consumers make existing debt payments rather than focusing on pandemic has primarily focused on helping consumers make existing debt payments rather than focusing on
access to new credit during the pandemic. If consumers find it difficult to access credit markets, the resulting reduction in access to new credit during the pandemic. If consumers find it difficult to access credit markets, the resulting reduction in
consumer spending could harm the economic recovery. consumer spending could harm the economic recovery.

Congressional Research Service Congressional Research Service

COVID-19: Household Debt During the Pandemic

Introduction
The The ~~Coronavirus Disease 2019 (COVID-19) pandemic1~~COVID-19 pandemic has had a large and persistent economic has had a large and persistent economic
impact across the United States.impact across the United States.21 Fear of infection, social distancing, and stay-at-home orders Fear of infection, social distancing, and stay-at-home orders
prompted business closures and a prompted business closures and a ~~severe~~ decline in demand for travel, accommodations, decline in demand for travel, accommodations,
restaurants, and entertainment, among other industries. This led to a significant reduction in restaurants, and entertainment, among other industries. This led to a significant reduction in
employment and a loss of income in many U.S. households. However, consumers have general y employment and a loss of income in many U.S. households. However, consumers have general y
not fal en delinquent on their loan obligations, not fal en delinquent on their loan obligations, such as mortgages, credit cards, auto loans, and such as mortgages, credit cards, auto loans, and
student loans. This pattern is unlike that of other student loans. This pattern is unlike that of other economic recessions, such as the Great economic recessions, such as the Great
Recession caused by the 2007-2009 financial crisis. Recession caused by the 2007-2009 financial crisis.
Many consumers having trouble paying their bil s have received Many consumers having trouble paying their bil s have received loan forbearance..32 Loan Loan
forbearance plans are agreements between borrowers and lenders that al ow borrowers to reduce forbearance plans are agreements between borrowers and lenders that al ow borrowers to reduce
or suspend payments for a short period of time, providing extended time for borrowers to become or suspend payments for a short period of time, providing extended time for borrowers to become
current on their payments and repay the amounts owed to the lenders. These plans do not forgive current on their payments and repay the amounts owed to the lenders. These plans do not forgive
unpaid loan payments and tend to be appropriate for borrowers experiencing temporary hardship.unpaid loan payments and tend to be appropriate for borrowers experiencing temporary hardship.4
3 In addition, many consumers who lost income received direct support from the government, In addition, many consumers who lost income received direct support from the government,
which may have helped them pay their bil s. which may have helped them pay their bil s.
Policy responses to the economic impacts of the COVID-19 pandemic have likely prevented Policy responses to the economic impacts of the COVID-19 pandemic have likely prevented
many consumers from fal ing delinquent on their loans. Specifical y, the Coronavirus Aid, Relief, many consumers from fal ing delinquent on their loans. Specifical y, the Coronavirus Aid, Relief,
and Economic Security (CARES) Act (P.L. 116-136), which was signed into law on March 27, and Economic Security (CARES) Act (P.L. 116-136), which was signed into law on March 27,
2020, granted forbearance for many types of mortgages (Section 4022) and for most federal 2020, granted forbearance for many types of mortgages (Section 4022) and for most federal
student loans (Section 3513).student loans (Section 3513).54 In addition to this legislative response, financial regulatory In addition to this legislative response, financial regulatory
agencies have responded to the COVID-19 pandemic using existing statutory authorities to agencies have responded to the COVID-19 pandemic using existing statutory authorities to
encourage loan forbearance and other financial relief options for affected consumers.encourage loan forbearance and other financial relief options for affected consumers.65 Since the Since the
COVID-19 pandemic began, many banks and credit unions have announced measures to offer COVID-19 pandemic began, many banks and credit unions have announced measures to offer
various forms of assistance to affected consumers various forms of assistance to affected consumers.

~~1 For background on the Coronavirus Disease 2019 (COVID-19), see CRS In Focus IF11421,~~ ~~COVID-19: Global~~
~~Im plications and Responses, by Sara M. T harakan et al.~~
2 Fiscal relief was likely another important factor making it easier for consumers to pay their existing loan obligations. In addition to the CARES Act, Congress enacted other legislation to respond to the COVID-19 pandemic, including provisions in the Consolidated Appropriations Act, 2021 (CAA; P.L. 116-260) and the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2). 1 For background on the potential economic effects of the COVID-19 pandemic in the United States, see CRS For background on the potential economic effects of the COVID-19 pandemic in the United States, see CRS ~~Insight~~
~~IN11388~~Report R46606, , COVID-19: and the U.S. Econom ~~ic Effects~~~~, by Rena S. Miller and Marc Labonte.~~
3y, by Lida R. Weinstock. 2 For more information on consumer loan forbearance during the COVID-19 pandemic, including CARES Act rights to For more information on consumer loan forbearance during the COVID-19 pandemic, including CARES Act rights to
forbearance, regulatory guidance, and impacts on consumers and financial institutions, seeforbearance, regulatory guidance, and impacts on consumers and financial institutions, see CRS Report R46356, CRS Report R46356,
COVID-19: Consum er Loan Forbearance and Other Relief Options, coordinated by Cheryl R. Cooper; and CRS , coordinated by Cheryl R. Cooper; and CRS
Insight IN11359, Insight IN11359, COVID-19: Financial Relief and Assistance Resources for Consum ers, by Maura Mullins and , by Maura Mullins and
Jennifer T eefy. Jennifer T eefy.
43 Loan forbearance agreements between consumers and financial institutions usually include a repayment plan, which is Loan forbearance agreements between consumers and financial institutions usually include a repayment plan, which is
an agreement allowing a defaulted borrower to repay an agreement allowing a defaulted borrower to repay ~~t he~~the amount in arrears and become current on the loan according to amount in arrears and become current on the loan according to
an agreed-upon schedule. Repayment plans take many shapes. For example, these plans may include a requirement that an agreed-upon schedule. Repayment plans take many shapes. For example, these plans may include a requirement that
all suspended payments are to be due at the end of the loan forbearance period; the past due amount all suspended payments are to be due at the end of the loan forbearance period; the past due amount isi s to be added to to be added to
the regular payment amount over the year after loan forbearance ends; or payments are to be added to the end of the the regular payment amount over the year after loan forbearance ends; or payments are to be added to the end of the
loan’s term. Interest or fees may or may not accrue during the loan forbearance period. loan’s term. Interest or fees may or may not accrue during the loan forbearance period.
54 For a summary of CARES Act provisions aimed broadly at stabilizing the economy and helping affected households For a summary of CARES Act provisions aimed broadly at stabilizing the economy and helping affected households
and businesses, see CRS Report R46301, and businesses, see CRS Report R46301, Title IV Provisions of the CARES Act (P.L. 116 -136), coordinated by Andrew , coordinated by Andrew
P. Scott . P. Scott .
65 Many financial regulatory agencies have updated their guidance to help financial firms support consumer needs Many financial regulatory agencies have updated their guidance to help financial firms support consumer needs
during this time. Regulatory guidance does not force financial institutions to take any particular action for consumers during this time. Regulatory guidance does not force financial institutions to take any particular action for consumers
(such as offering loan forbearance), but it can encourage them to offer various forms of support. (such as offering loan forbearance), but it can encourage them to offer various forms of support.
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~~The CARES Act also provided fiscal relief, which was likely another important factor making it~~
~~easier for consumers to pay their existing loan obligations. These actions~~Fiscal relief provisions in these laws included direct income included direct income
support in the form of enhanced unemployment insurance and relief checks phased out for higher-support in the form of enhanced unemployment insurance and relief checks phased out for higher-
income taxpayers (cal ed Economic Impact Payments), among other things.income taxpayers (cal ed Economic Impact Payments), among other things.76 These income These income
transfer programs may have helped some consumers stay current on their consumer credit transfer programs may have helped some consumers stay current on their consumer credit
payments, particularly those who payments, particularly those who have lost income during the COVID-19 pandemic. have lost income during the COVID-19 pandemic.
This report explores household debt since the COVID-19 pandemic began. First, it describes the This report explores household debt since the COVID-19 pandemic began. First, it describes the
effects the pandemic has had on unemployment and income losses, fol owed by a discussion of effects the pandemic has had on unemployment and income losses, fol owed by a discussion of
observed trends in household debt and delinquencies. Then, the report highlights two important observed trends in household debt and delinquencies. Then, the report highlights two important
policy impacts that influenced these trends: consumer loan forbearance and macroeconomic policy impacts that influenced these trends: consumer loan forbearance and macroeconomic
policy to support households during the economic recession. Lastly, the report discusses the policy to support households during the economic recession. Lastly, the report discusses the
uncertain outlook for household finances and consumer debt markets. uncertain outlook for household finances and consumer debt markets.
Household Income During the COVID-19 Pandemic
The spread of COVID-19 and the ensuing public health crisis resulted in a dramatic increase in The spread of COVID-19 and the ensuing public health crisis resulted in a dramatic increase in
unemployment, which peaked at 14.7% in Aprilunemployment, which peaked at 14.7% in April 2020 and has since fal en to 6.and has since fal en to 6.~~9% in October.8~~0% in March 2021.7 These These
rates are the highest since the Great Depression and are worse than the peak unemployment rate rates are the highest since the Great Depression and are worse than the peak unemployment rate
during the 2007-2009 Great Recession over a decade ago.during the 2007-2009 Great Recession over a decade ago.98 Consequently, many Americans have Consequently, many Americans have
lost income and faced financial hardship due to the impact of the lost income and faced financial hardship due to the impact of the pandemic.pandemic.10
Survey results suggest that since March 2020, about half of al adults live in a household that has Survey results suggest that since March 2020, about half of al adults live in a household that has
lost some employment income.lost some employment income.119 Figure 1 shows selected results from the Federal Reserve Bank shows selected results from the Federal Reserve Bank
of Philadelphia’s COVID-19 Survey of Consumers, an online survey conducted to gather of Philadelphia’s COVID-19 Survey of Consumers, an online survey conducted to gather
information from respondents about income, employment, and financial security during the information from respondents about income, employment, and financial security during the
COVID-19 pandemic. So far, the survey has been administered in COVID-19 pandemic. So far, the survey has been administered in ~~five~~seven waves during April, May, waves during April, May,
June, July, June, July, September, and November 2020 and January 2021~~and September 2020~~. In the first wave of the survey, conducted in April. In the first wave of the survey, conducted in April 2020, 39., 39. 1% of 1% of
respondents indicated a reduction in personal income, or no income, as a result of the pandemic.respondents indicated a reduction in personal income, or no income, as a result of the pandemic.12
~~Waves 2, 3, 4, and 5 saw some improvements to personal income loss as the percentage of~~

710 That rate fel to 32.7% in June 2020 and has since fluctuated between 31% and 33% (see Figure 1).11 This loss of income may be a large unexpected financial event for many families, and research suggests that many families may not have much emergency savings. For example, a 2019 Federal 6 For more information on the direct payments to individuals For more information on the direct payments to individuals ~~in the CARES Act, see~~ , see CRS Insight CRS Insight ~~IN11282~~IN11605, , COVID-19
and Direct Paym ents: Com parison of First and Second Round of “Stim ulus Checks” to the Third Round in the Am erican Rescue Plan Act of 2021 (ARPA; P.L. 117-2~~Paym ents to Individuals: Sum m ary of the 2020 Recovery Rebates/Econom ic Impact Payments in the CARES~~
~~Act (P.L. 116-136~~), by Margot L. Crandall-Hollick. , by Margot L. Crandall-Hollick.
87 Bureau of Labor Statistics, Bureau of Labor Statistics, The Employment Situation—~~October 2020~~~~, November 6~~March 2021, April 2, 2020, at https://www.bls.gov/, 2020, at https://www.bls.gov/
news.release/pdf/empsit.pdf. For more background on how unemployment is calculated and other related economic news.release/pdf/empsit.pdf. For more background on how unemployment is calculated and other related economic
concepts, see CRS In Focus IF10443, concepts, see CRS In Focus IF10443, Introduction to U.S. Econom y: Unem ployment, by Lida R. Weinstock. , by Lida R. Weinstock.
98 T he official unemployment rates are possibly underestimates as well—the Bureau of Labor Statistics reported a likely T he official unemployment rates are possibly underestimates as well—the Bureau of Labor Statistics reported a likely
error in how respondents classified being furloughed. For more, see CRS Insight IN11456, error in how respondents classified being furloughed. For more, see CRS Insight IN11456, COVID-19: Measuring
Unem ploym ent, by Lida R. Weinstock. , by Lida R. Weinstock.
~~10 For more information on financial industry policy issues during the COVID-19 pandemic for consumers having~~
~~trouble paying their bills, see CRS Insight IN11244,~~ ~~COVID-19: The Financial Industry and Consum ers Struggling to~~
~~Pay Bills, by Cheryl R. Cooper.~~
119 For more information on income losses during the COVID-19 pandemic, see CRS Insight IN11457, For more information on income losses during the COVID-19 pandemic, see CRS Insight IN11457, COVID-19
Pandemic’s Impact on Household Employment and Income, by Gene Falk. , by Gene Falk.
1210 Federal Reserve Bank of Philadelphia, Consumer Finance Institute Special Report, Federal Reserve Bank of Philadelphia, Consumer Finance Institute Special Report, CFI COVID-19 Survey of
Consum ers—Wave ~~5 Supplies More Details on Disruptions and New Data on Savings~~7 Relief Program s, Vaccines, and the Effects of the Crisis on Renters and Mortgage Holders, at , at
https://www.philadelphiafed.org/https://www.philadelphiafed.org/~~consumer-finance/consumer-credit~~-/media/frbp/assets/consumer-finance/reports/cfi-covid-19-survey-of-consumers-/cfi-covid-19-survey-of-consumers-wave-7-updates.pdf. See ~~wave-5-~~
~~updates, see~~ T able 4—Impact to personal Income (hereinafter Federal Reserve Bank of Philadelphia, T able 4—Impact to personal Income (hereinafter Federal Reserve Bank of Philadelphia, ““ COVID-19 COVID-19
Survey of Consumers—Wave Survey of Consumers—Wave ~~5” 2020, see T able 4).~~
7” 2021, see T able 4). 11 Federal Reserve Bank of Philadelphia, “ COVID-19 Survey of Consumers—Wave 7” 2021, see T able 4. Congressional Research Service Congressional Research Service
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COVID-19: Household Debt During the Pandemic

~~respondents reporting a reduction in personal income, or no income, decreased to 35.8%, 32.7%,~~
~~and 32.1%, and 31.7%, respectively.13~~
~~This loss of income may be a large unexpected financial event for many families, and research~~
~~suggests that many families may not have much emergency savings. For example, a 2019 Federal~~
Reserve survey, before the COVID-19 pandemic, found that 37% of families reported not being Reserve survey, before the COVID-19 pandemic, found that 37% of families reported not being
able to cover a $400 emergency expense with savings or the equivalent.able to cover a $400 emergency expense with savings or the equivalent.1412 Therefore, this Therefore, this
employment income loss has led some Americans to feel more insecure about their financial employment income loss has led some Americans to feel more insecure about their financial
situation. When asked how the COVID-19 crisis affected their concern about their ability to make situation. When asked how the COVID-19 crisis affected their concern about their ability to make
ends meet over the next 12 months, 27.7% of respondents in April ends meet over the next 12 months, 27.7% of respondents in April 2020 indicated feeling significantly indicated feeling significantly
less secure than they did prior to the crisis; seless secure than they did prior to the crisis; see Figure 1.1513 Responses to this Responses to this question about question about
financial security showed improvement in subsequent waves. The percentage of respondents financial security showed improvement in subsequent waves. The percentage of respondents
reporting significant concern about their ability to make ends meet over the next 12 reporting significant concern about their ability to make ends meet over the next 12 months months
~~decreased from 20.4% in May down to 14.6% in June. However, this percentage increased to~~
~~15.6% in July, indicating a slight reversal in the downward trend and an increased concern among~~
~~respondents about their ability to make ends meet in the next 12 months. This percentage~~
~~decreased slightly to 14.4% in September.16~~decreased to 16.3% in January 2021.14
Figure 1. Percentage of Households Reporting Lost Income and Significantly Less
Financial Security Since COVID-19 Crisis
April, May, June, July, April, May, June, July, September, and November 2020 and January 2021~~and September 2020~~

Source: Federal Reserve Bank of Philadelphia, Consumer Finance Institute’s Special Report, COVID-19 Survey Federal Reserve Bank of Philadelphia, Consumer Finance Institute’s Special Report, COVID-19 Survey
of Consumers—Wave of Consumers—Wave 57, at https://www.philadelphiafed.org/, at https://www.philadelphiafed.org/~~consumer-finance/consumer-credit~~-/media/frbp/assets/consumer-finance/reports/cfi-covid-19-/cfi-covid-19-
survey-of-consumers-wave-survey-of-consumers-wave-57-updates.pdf. The income loss from the COVID-19 pandemic may impact the ability of some families to pay their loan obligations or other bil s. Late loan payments can harm an individual’s credit score, which could reduce their access to credit in the future. Severe delinquency can also eventual y lead to more serious consequences, such as debt collection, foreclosure, car repossession, or wage garnishment. For this reason, many policymakers are interested in understanding the impact of COVID-19 pandemic income losses on household debt and delinquency. 12~~-updates.~~

~~13 Federal Reserve Bank of Philadelphia, “ COVID-19 Survey of Consumers—Wave 5” 2020, see T able 4.~~
14 Board of Governors of the Federal Reserve, Board of Governors of the Federal Reserve, Report on the Economic Well-Being of U.S. Households in 2019,
Featuring Supplem ental Data from April 2020 , May 2020, pp. 2-3, at https://www.federalreserve.gov/publications/, May 2020, pp. 2-3, at https://www.federalreserve.gov/publications/
files/2019-report -economic-well-being-us-households-202005.pdf. files/2019-report -economic-well-being-us-households-202005.pdf.
1513 Federal Reserve Bank of Philadelphia, Consumer Finance Institute Special Report, Federal Reserve Bank of Philadelphia, Consumer Finance Institute Special Report, CFI COVID-19 Survey of
Consum ers—Wave ~~5 Supplies More Details on Disruptions and New Data on Savings~~7 Relief Program s, Vaccines, and the Effects of the Crisis on Renters and Mortgage Holders, at , at
https://www.philadelphiafed.org/https://www.philadelphiafed.org/-/media/frbp/assets/consumer-finance/consumer-finance/~~consumer-credit~~reports/cfi-covid-19-survey-of-consumers-/cfi-covid-19-survey-of-consumers-wave-7-updates.pdf~~wave-5-~~
~~updates~~, see T able , see T able 67—Financial Security and Outlook (hereinafter Federal Reserve Bank of Philadelphia, —Financial Security and Outlook (hereinafter Federal Reserve Bank of Philadelphia, ““ COVID-19 COVID-19
Survey of Consumers—Wave Survey of Consumers—Wave ~~5” 2020~~7” 2021, see T able , see T able 67). ).
1614 Federal Reserve Bank of Philadelphia, “ COVID-19 Survey of Consumers—Wave Federal Reserve Bank of Philadelphia, “ COVID-19 Survey of Consumers—Wave ~~5” 2020~~7” 2021, see T able , see T able 67. .
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link to page link to page 8 7 COVID-19: Household Debt During the Pandemic Household Debt and Delinquency Trends As of the fourth quarter of 2020, household debt totaled $14.6 tril ion.15 By far, the largest type of household debt was mortgage debt at $10.0 tril ion.16~~COVID-19: Household Debt During the Pandemic~~

Notes: Data from Waves 1, 2, 3, and 4 of the Consumer Finance Institute’s Special Report, COVID-19 Survey
~~of Consumers, are available at https://www.philadelphiafed.org/consumer-finance/consumer-credit/cfi-covid-19-~~
~~survey-of-consumers, https://www.philadelphiafed.org/consumer-finance/consumer-credit/cfi-covid-19-survey-of-~~
~~consumers-wave2-updates, https://www.philadelphiafed.org/consumer-finance/consumer-credit/cfi-covid-19-~~
~~survey-of-consumers-wave-3-updates, and https://www.philadelphiafed.org/consumer-finance/consumer-credit/~~
~~cfi-covid-19-survey-of-consumers-wave-4-updates, respectively.~~
~~The income loss from the COVID-19 pandemic may impact the ability of some families to pay~~
~~their loan obligations or other bil s. Late loan payments can harm an individual’s credit score,~~
~~which could reduce their access to credit in the future. Severe delinquency can also eventual y~~
~~lead to more serious consequences, such as debt collection, foreclosure, car repossession, or wage~~
~~garnishment. For this reason, many policymakers are interested in understanding the impact of~~
~~COVID-19 pandemic income losses on household debt and delinquency.~~
~~Household Debt and Delinquency Trends~~
~~As of the third quarter of 2020, household debt totaled $14.4 tril ion.17 By far, the largest type of~~
~~household debt was mortgage debt at $9.9 tril ion.18~~ The second largest type of debt was student The second largest type of debt was student
loan debt totaling $1.6 tril ion, followed by auto loan debt at $1.4 tril ion, and credit card debt at loan debt totaling $1.6 tril ion, followed by auto loan debt at $1.4 tril ion, and credit card debt at
~~$807~~$819 bil ion. bil ion.1917 Figure 2 shows total household debt and its composition since 2006 using data shows total household debt and its composition since 2006 using data
from the Federal Reserve Bank of New York. It highlights household debt levels during the two from the Federal Reserve Bank of New York. It highlights household debt levels during the two
most recent recessions, the Great Recession that began in late 2007 as a result of the 2007-2009 most recent recessions, the Great Recession that began in late 2007 as a result of the 2007-2009
financial crisis and the current recession that began in early 2020 with the COVID-19 pandemic. financial crisis and the current recession that began in early 2020 with the COVID-19 pandemic.
After peaking in 2008, total household debt gradual y decreased over a period of nearly five years After peaking in 2008, total household debt gradual y decreased over a period of nearly five years
until the middle of 2013, at which time household debt began increasing again. until the middle of 2013, at which time household debt began increasing again.
Figure 2. Total Household Debt and Its Composition 1st Quarter 2006 through 4th Quarter 2020 Source: New York Federal Reserve Bank Consumer Credit Panel/Equifax, at https://www.newyorkfed.org/microeconomics/hhdc/background.html. Notes: The data are inflation-adjusted to 2020Q4 dol ars. HE revolving debt refers to home equity lending. Economic recessions are shaded in the graph. Although the current level of debt is around its 2008 peak, the composition of household debt has changed in the past decade. In 2008, mortgage debt (including home equity debt) was a much 15
17 Federal Reserve Bank of New York, Federal Reserve Bank of New York, Household Debt and Credit (Based on New York Fed Consumer Credit Panel) , ,
Center for Microeconomic Data, Center for Microeconomic Data, Q3Q4 2020, at https://www.newyorkfed.org/microeconomics/hhdc/background.html 2020, at https://www.newyorkfed.org/microeconomics/hhdc/background.html
(hereinafter Federal Reserve Bank of New York, (hereinafter Federal Reserve Bank of New York, Household Debt and Credit, , Q3Q4 2020). For an overview of consumer 2020). For an overview of consumer
financial markets, see CRS Report R45813, financial markets, see CRS Report R45813, An Overview of Consum er Finance and Policy Issues, by Cheryl R. , by Cheryl R.
Cooper. Cooper.
1816 Federal Reserve Bank of New York, Federal Reserve Bank of New York, Household Debt and Credit, , Q3Q4 2020. 2020.
1917 Federal Reserve Bank of New York, Federal Reserve Bank of New York, Household Debt and Credit, , Q3Q4 2020. 2020.
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link to page 9 COVID-19: Household Debt During the Pandemic ~~COVID-19: Household Debt During the Pandemic~~

~~Figure 2. Total Household Debt and Its Composition~~
~~1st Quarter 2006 – 3rd Quarter 2020~~

Source: New York Fed Consumer Credit Panel/Equifax, at https://www.newyorkfed.org/microeconomics/hhdc/
~~background.html.~~
Notes: The data are inflation-adjusted to 2020Q3 dol ars. HE revolving debt refers to home equity lending.
~~Economic recessions are shaded in the graph.~~
~~Although the current level of debt is close to its 2008 peak, the composition of household debt~~
~~has changed in the past decade. In 2008, mortgage debt (including home equity debt) was a much~~
larger proportion of household debt than it is now. Since the last recession, student loan debt has larger proportion of household debt than it is now. Since the last recession, student loan debt has
doubled and auto loan debt has also grown. doubled and auto loan debt has also grown.
During the second and third quarters of 2020, the pandemic had affected different types of During the second and third quarters of 2020, the pandemic had affected different types of
aggregate household debt balances differently. Notably, credit card balances declined sharply aggregate household debt balances differently. Notably, credit card balances declined sharply
during the second quarter by about $76 bil ion, the largest quarterly decline on record.during the second quarter by about $76 bil ion, the largest quarterly decline on record.2018 By By
contrast, there were increases in mortgage debt balances, but other household debt balances contrast, there were increases in mortgage debt balances, but other household debt balances
remained relativelyremained relatively ~~flat in the second and third quarters of 2020.21~~ flat in 2020.19 These effects surprised some These effects surprised some
observers who thought that credit card debt would increase during the quarter due to lost income observers who thought that credit card debt would increase during the quarter due to lost income
from the COVID-19 pandemic.from the COVID-19 pandemic.22 20 The Consumer Financial Protection Bureau (CFPB) finds credit The Consumer Financial Protection Bureau (CFPB) finds credit
card balance declines “across al groups, including consumers residing in both high- and low-card balance declines “across al groups, including consumers residing in both high- and low-
income census tracts,” possibly due income census tracts,” possibly due to a decline in consumer spending.21 Moreover, consumers who were having financial difficulties before the pandemic also experienced credit card debt reductions.22 Despite many ~~to a decline in consumer spending.23 Despite many~~

~~20 Federal Reserve Bank of New York, Household Debt and Credit, Q3 2020.~~
~~21 Andrew F. Haughwout et al., A Monthly Peek into Americans’ Credit During the COVID-19 Pandemic, Federal~~
~~Reserve Bank of New York, Liberty Street Economics, August 6, 2020, at~~
~~https://libertystreeteconomics.newyorkfed.org/2020/08/a-monthly-peek-into-americans-credit-during-the-covid-19-~~
~~pandemic.html.~~
~~22 Jeanna Smialek, “Credit Card Debt Plunges, Driving a Decline in Overall Household Debt,” New York Times,~~
~~August 6, 2020.~~
~~23 Ryan Sandler and Judith Ricks, The Early Effects of the COVID-19 Pandemic on Consumer Credit, Consumer~~
~~Congressional Research Service~~
5

~~link to page 9~~

~~COVID-19: Household Debt During the Pandemic~~

Americans losing income, consumers have general y not fal en delinquent on their loan Americans losing income, consumers have general y not fal en delinquent on their loan
obligations. This pattern is unlike during other economic recessions, such as the 2007-2009 Great obligations. This pattern is unlike during other economic recessions, such as the 2007-2009 Great
Recession. In Recession. In ~~the second and third quarters of~~ 2020, the percentage of delinquent loans declined 2020, the percentage of delinquent loans declined
in most consumer debt marketsin most consumer debt markets. Figure 3 shows the percentage of delinquent loans that are 30 or shows the percentage of delinquent loans that are 30 or
more days late, by loan more days late, by loan type, on a quarterly basis between the first quarter of 2006 and the most type, on a quarterly basis between the first quarter of 2006 and the most
recent quarter of 2020. Whereas delinquency increased during the Great Recession, a similar recent quarter of 2020. Whereas delinquency increased during the Great Recession, a similar
pattern is not observed during the COVID-19 pandemic. Student loans experienced the largest pattern is not observed during the COVID-19 pandemic. Student loans experienced the largest
decrease in delinquency decrease in delinquency during ~~during the second quarter of~~ 2020, and delinquency rates for most other 2020, and delinquency rates for most other
types of consumer debt also notably fel . Some of this decline is due to consumers entering into types of consumer debt also notably fel . Some of this decline is due to consumers entering into
loan forbearance agreements (discussed in the loan forbearance agreements (discussed in the next section). 18 Federal Reserve Bank of New York, Household Debt and Credit, Q4 2020. 19 Andrew F. Haughwout et al., A Monthly Peek into Americans’ Credit During the COVID-19 Pandemic, Federal Reserve Bank of New York, Liberty Street Economics, August 6, 2020, at https://libertystreeteconomics.newyorkfed.org/2020/08/a-monthly-peek-into-americans-credit-during-the-covid-19-pandemic.html. 20 Jeanna Smialek, “Credit Card Debt Plunges, Driving a Decline in Overall Household Debt,” New York Times, August 6, 2020. 21 Ryan Sandler and Judith Ricks, The Early Effects of the COVID-19 Pandemic on Consumer Credit, Consumer Financial Protection Bureau (CFPB), CFPB Office of Research Special Issue Brief, August 2020, p. 3, at https://www.consumerfinance.gov/data-research/research-reports/special-issue-brief-early-effects-covid-19-pandemic-on-consumer-credit/ (hereinafter Ryan Sandler and Judith Ricks, Household Debt and Credit, August 2020). 22 Scott Fulford and Marie Rush, Credit Card Debt Fell Even for Consumers Who Were Having Financial Difficulties Before the Pandem ic, CFPB, December 17, 2020, at https://www.consumerfinance.gov/about -us/blog/credit -card-debt-fell-even-consumers-having-financial-difficulties-before-pandemic/. Congressional Research Service 5 COVID-19: Household Debt During the Pandemic Figure 3. Percentage of Delinquent Loans (30+ Days Late) by Loan Type: 1st Quarter 2006 through 4th Quarter 2020 Source: New York Federal Reserve Bank Consumer Credit Panel/Equifax, at https://www.newyorkfed.org/microeconomics/hhdc/background.html. Notes: HE revolving debt refers to home equity lending. Economic recessions are shaded in the graph. Consumer Loan Forbearance Trends Many consumers who would likely have experienced difficulty repaying their loans received loan forbearance.23 Loan forbearance plans can prevent a consumer from becoming delinquent, giving the consumer time to repay the debts owed rather than potential y experiencing adverse consequences, such as credit score declines, debt collection, or foreclosure. As previously ~~next section).~~
~~Figure 3. Percentage of Delinquent Loans (30+ Days Late) by Loan Type:~~
~~1st Quarter 2006 – 3rd Quarter 2020~~

Source: New York Fed Consumer Credit Panel/Equifax, at https://www.newyorkfed.org/microeconomics/hhdc/
~~background.html.~~
Notes: HE revolving debt refers to home equity lending. Economic recessions are shaded in the graph.
~~Consumer Loan Forbearance Trends~~
~~Many consumers who would likely have experienced difficulty repaying their loans received~~ ~~loan~~
~~forbearance.24 Loan forbearance plans can prevent a consumer from becoming delinquent, giving~~
~~the consumer time to repay the debts owed rather than potential y experiencing adverse~~
~~consequences, such as credit score declines, debt collection, or foreclosure. As previously~~

~~Financial Protection Bureau (CFPB), CFPB Office of Research Special Issue Brief, August 2020, p. 3, at~~
~~https://www.consumerfinance.gov/data-research/research-reports/special-issue-brief-early-effects-covid-19-pandemic-~~
~~on-consumer-credit/ (hereinafter Ryan Sandler and Judith Ricks, Household Debt and Credit, August 2020).~~
~~24 For more information on consumer loan forbearance during the COVID-19 pandemic, including CARES Act rights~~
~~to forbearance, regulatory guidance, and impacts on consumers and financial institutions, see CRS Report R46356,~~
COVID-19: Consum er Loan Forbearance and Other Relief Options, coordinated by Cheryl R. Cooper; and CRS
~~Insight IN11359, COVID-19: Financial Relief and Assistance Resources for Consum ers, by Maura Mullins and~~
~~Jennifer T eefy.~~
~~Congressional Research Service~~
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~~link to page 11~~ ~~COVID-19: Household Debt During the Pandemic~~

mentioned, the CARES Act established consumer rights to be granted forbearance for federal y mentioned, the CARES Act established consumer rights to be granted forbearance for federal y
backed mortgages and for most federal student loans during the COVID-19 pandemic. In backed mortgages and for most federal student loans during the COVID-19 pandemic. In
addition, many financial institutions voluntarily offered loan forbearance and other financial relief addition, many financial institutions voluntarily offered loan forbearance and other financial relief
options for affected consumers having trouble paying other types of loan obligations, such as auto options for affected consumers having trouble paying other types of loan obligations, such as auto
loans, credit cards, private student loans, and bank-owned mortgages. The CARES Act’s loans, credit cards, private student loans, and bank-owned mortgages. The CARES Act’s
consumer protections and financial institutions’ loan forbearance programs arguably helped avoid consumer protections and financial institutions’ loan forbearance programs arguably helped avoid
sharp increases in loan delinquencies by making it possible for many loans to receive forbearance sharp increases in loan delinquencies by making it possible for many loans to receive forbearance
during during ~~the spring and summer of~~ 2020. Loans in forbearance are not classified as delinquent, 2020. Loans in forbearance are not classified as delinquent,
although they may be driven although they may be driven by similar underlying circumstances for the borrower. by similar underlying circumstances for the borrower.
According to the Federal Reserve Bank of Philadelphia’s COVID-19 Survey of Consumers According to the Federal Reserve Bank of Philadelphia’s COVID-19 Survey of Consumers in
~~April 2020, 18.0% of respondents reported requesting a deferral or reduced payments on~~
~~mortgages, rents, or utilities, 18.1% of respondents reported requesting a deferral on a non-~~
~~mortgage debt, and 14.0% reported seeking a new loan due to the impacts of the COVID-19~~
~~crisis.25 Not al of these consumers reported receiving the financial assistance they requested;~~
~~about a quarter of respondents reported not receiving a requested deferral.26 The percentage of~~
~~respondents reporting seeking financial assistance rose slightly between April and September~~
~~2020 in most categories, including those who have requested payment deferrals.27~~
~~Many mortgage borrowers entered loan forbearance at the beginning of the COVID-19 pandemic.~~
~~According to~~ , as of January 2021, over 10% of survey respondents used mortgage forbearance at some point during the pandemic.24 Consumers who had used mortgage forbearance were more likely to be living in 23 For more information on consumer loan forbearance during the COVID-19 pandemic, including CARES Act rights to forbearance, regulatory guidance, and impacts on consumers and financial institutions, see CRS Report R46356, COVID-19: Consum er Loan Forbearance and Other Relief Options, coordinated by Cheryl R. Cooper; and CRS Insight IN11359, COVID-19: Financial Relief and Assistance Resources for Consum ers, by Maura Mullins and Jennifer T eefy. 24 Lauren Lambie-Hanson, James Vickery, and T om Akana, Recent Data on Mortgage Forbearance: Borrower Uptake Congressional Research Service 6 link to page 11 COVID-19: Household Debt During the Pandemic urban areas and working in an industry impacted by the pandemic, such as leisure and hospitality.25 Research suggests that lower-income and minority consumers26 and those with lost income and receiving unemployment insurance during the pandemic27 were more likely to use mortgage forbearance than was the rest of the U.S. population. Many mortgage borrowers entered loan forbearance at the beginning of the COVID-19 pandemic in April 2020. According to the Mortgage Bankers Association’s (MBA’s) Forbearance and Cal Volume Survey, Mortgage Bankers Association’s (MBA’s) Forbearance and Cal Volume Survey,
the percentage of single-family mortgage loans estimated to be in forbearance as the percentage of single-family mortgage loans estimated to be in forbearance as of the end of April 2020 was 4~~of the beginning~~
~~of November was 5~~.47%.28 Before the pandemic, the proportion of mortgage loans in .47%.28 Before the pandemic, the proportion of mortgage loans in forbearance forbearance
was relatively smal . According to the MBA, the total share of loans in forbearance increased was relatively smal . According to the MBA, the total share of loans in forbearance increased
from 0.25% to 2.66% between March 2 and April 1, 2020.29 At the beginning of Aprilfrom 0.25% to 2.66% between March 2 and April 1, 2020.29 At the beginning of April 2020, following , following
the passage of the CARES Act, MBAthe passage of the CARES Act, MBA ~~initiated~~ initiated a weekly survey of forbearance and cal a weekly survey of forbearance and cal ~~reporting~~reporting. .
Figure 4 shows the share of mortgage loans in forbearance each week starting in early Aprilshows the share of mortgage loans in forbearance each week starting in early April 2020
through the through the ~~beginning of November~~end of April 2021. The reported percentage of mortgages in forbearance . The reported percentage of mortgages in forbearance
increased in April and May, reaching a high of 8.55% as of June 7, 2020.30 Since increased in April and May, reaching a high of 8.55% as of June 7, 2020.30 Since mid-June, the mid-June, the
share of mortgage loans in forbearance has general y decreased each week, share of mortgage loans in forbearance has general y decreased each week, although it remains although it remains
much higher than before the pandemic. much higher than before the pandemic.

~~25 Federal Reserve Bank of Philadelphia, “ COVID-19 Survey of Consumers,” Consumer Finance Institute’s Special~~
~~Report, May 2020, pp. 8, 20, at https://www.philadelphiafed.org/consumer-finance/consumer-credit/cfi-covid-19-~~
~~survey-of-consumers (hereinafter Federal Reserve Bank of Philadelphia, “ COVID-19 Survey of Consumers,” 2020).~~
~~26 Federal Reserve Bank of Philadelphia, “ COVID-19 Survey of Consumers,” 2020, p. 20.~~
~~27 Federal Reserve Bank of Philadelphia, Consumer Finance Institute Special Report,~~ ~~CFI COVID-19 Survey of~~
~~Consum ers—Wave 5 Supplies More Details on Disruptions and New Data on Savings, at~~
~~https://www.philadelphiafed.org/consumer-finance/consumer-credit/cfi-covid-19-survey-of-consumers-wave-5-~~
~~updates, see T able 8—Financial Assistance Sought.~~
~~28 Mortgage Bankers Association (MBA), “Share of Mortgage Loans in Forbearance Declines to 5.47%,” press release,~~
~~November 16, 2020, at https://www.mba.org/2020-press-releases/november/share-of-mortgage-loans-in-forbearance-~~
~~decreases-to-547~~and Understanding of Lender Accom m odations, Federal Reserve Bank of Philadelphia, Consumer Finance Institute, March 2021, at https://www.philadelphiafed.org/-/media/frbp/assets/consumer-finance/reports/21_02_cfi_research-brief-mortgage-forbearance.pdf (hereinafter Lauren Lambie-Hanson, James Vickery, and T om Akana, Recent Data on Mortgage Forbearance, 2021). 25 Lauren Lambie-Hanson, James Vickery, and T om Akana, Recent Data on Mortgage Forbearance, 2021. 26 Xudong An et al., Inequality in the Time of COVID-19: Evidence from Mortgage Delinquency and Forbearance, Federal Reserve Bank of Philadelphia, Consumer Finance Institute, Research Department Working Paper 21 -09, February 24, 2021, at https://www.philadelphiafed.org/-/media/frbp/assets/working-papers/2021/wp21-09.pdf. 27 Chen Zhao, Diana Farrell, and Fiona Greig, Did Mortgage Forbearance Reach the Right Homeowners? Income and Liquid Assets T rends for Homeowners during the COVID-19 Pandemic, JP Morgan Chase & Co. Institute, December 2020, at https://www.jpmorganchase.com/institute/research/household-debt/report-did-mortgage-forbearance-reach-the-right -homeowners. 28 Mortgage Bankers Association (MBA), “Share of Mortgage Loans in Forbearance Decreases to 4.50 Percent,” press release, April 19, 2021, at https://www.mba.org/2021-press-releases/april/share-of-mortgage-loans-in-forbearance-decreases-to-450-percent. -percent.
29 MBA, “MBA Survey Shows Spike in Loans in Forbearance, Servicer Call Volume,” press release, April 7, 2020, at 29 MBA, “MBA Survey Shows Spike in Loans in Forbearance, Servicer Call Volume,” press release, April 7, 2020, at
https://www.mba.org/2020-press-releases/april/mba-survey-shows-spike-in-loans-in-forbearance-servicer-call-volume. https://www.mba.org/2020-press-releases/april/mba-survey-shows-spike-in-loans-in-forbearance-servicer-call-volume.
30 MBA, “Share of Mortgage Loans in Forbearance Increases to 8.55%,” press release, June 15, 2020, at 30 MBA, “Share of Mortgage Loans in Forbearance Increases to 8.55%,” press release, June 15, 2020, at
https://www.mba.org/2020-press-releases/june/share-of-mortgage-loans-in-forbearance-increases-to-855. https://www.mba.org/2020-press-releases/june/share-of-mortgage-loans-in-forbearance-increases-to-855.
Congressional Research Service Congressional Research Service
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COVID-19: Household Debt During the Pandemic

Figure 4. Weekly Share of Mortgage Loans in Forbearance
April April~~-November 2020~~ 2020 through April 2021

Source: Mortgage Bankers AssociationMortgage Bankers Association’s (MBA)(MBA), Weekly Forbearance and Cal Volume Weekly Forbearance and Cal Volume Survey. See also MBA’s Survey. See also MBA’s
press releases for survey highlights, at https://www.mba.org/search/press-release-sea rch?keywords=forbea rance&press releases for survey highlights, at https://www.mba.org/search/press-release-sea rch?keywords=forbea rance&
start=0&rows=10. start=0&rows=10.
Notes: MBA’s weekly survey covers more than three quarters of first-lien mortgages. MBA’s weekly survey covers more than three quarters of first-lien mortgages.
Forbearance increased not only for mortgage loans but for other consumer credit products as wel. Forbearance increased not only for mortgage loans but for other consumer credit products as wel.
~~The Trump Administration has set the federal student loan interest rate~~Federal student loan interest rates have been set to zero, and borrowers wil to zero, and borrowers wil
not be required to make payments due on their loans through not be required to make payments due on their loans through ~~the end of 2020~~at least September 2021, effectively putting , effectively putting
al of these loans automatical y in forbearance.31 Loan forbearance also rose in auto loan and al of these loans automatical y in forbearance.31 Loan forbearance also rose in auto loan and
credit card credit card markets, where consumers do not have a right in the CARES Act to forbearance. markets, where consumers do not have a right in the CARES Act to forbearance.
However, many lenders may stil offer it as an option to consumers. According to the CFPB, auto However, many lenders may stil offer it as an option to consumers. According to the CFPB, auto
loans in forbearance increased from about 1.5% in February 2020 to about 3% in June 2020, and loans in forbearance increased from about 1.5% in February 2020 to about 3% in June 2020, and
credit card loans in forbearance increased from about 1.5% in February 2020 to about 3.5% in credit card loans in forbearance increased from about 1.5% in February 2020 to about 3.5% in
June 2020.32 In addition, payment assistance was “more likely to be reported for borrowers June 2020.32 In addition, payment assistance was “more likely to be reported for borrowers
residing in areas with more COVID-19 cases, with majority-Black or majority-Hispanic populations, and with larger changes in unemployment since the start of the pandemic.”33
31 Section 3513 of the CARES Act suspends all payments due and interest accrual for all loans made under the Direct 31 Section 3513 of the CARES Act suspends all payments due and interest accrual for all loans made under the Direct
Loan program and the Federal Family Education Loan program held by the Department of Education throughLoan program and the Federal Family Education Loan program held by the Department of Education through
~~September 30, 2020. On August 8, 2020, President T rump directed the Department of Education to extend the “ waiver~~
~~of all interest” on federally held student loans through December 31, 2020~~ September 30, 2020. T his expiration date has been extended administratively, currently through September 2021. For more information about federal student . For more information about federal student
loan debt relief in the context of COVID-19, see CRS Report R46314, loan debt relief in the context of COVID-19, see CRS Report R46314, Federal Student Loan Debt Relief in the Context
of COVID-19, by Alexandra Hegji. , by Alexandra Hegji.
32 T he CFPB calculates payment assistance “as an account being reported with a zero scheduled 32 T he CFPB calculates payment assistance “as an account being reported with a zero scheduled ~~paym ent~~payment due despite a due despite a
positive balance.” T he CFPB notes that “the variation in the incidence of consumer assistance reported ... may have as positive balance.” T he CFPB notes that “the variation in the incidence of consumer assistance reported ... may have as
much to do with how furnishers in each market report to the [credit bureaus] as it does with the incidence of actual much to do with how furnishers in each market report to the [credit bureaus] as it does with the incidence of actual
assistance.” Ryan Sandler and Judith Ricks, assistance.” Ryan Sandler and Judith Ricks, Household Debt and Credit, August 2020, pp. 13-15. Other sources , August 2020, pp. 13-15. Other sources
calculate estimates differently than the CFPB, and report different percentages. For example, T ransunion creates a calculate estimates differently than the CFPB, and report different percentages. For example, T ransunion creates a
broader metric called “accounts in hardship,” which includes loans “affected by natural/declared disaster, accounts broader metric called “accounts in hardship,” which includes loans “affected by natural/declared disaster, accounts
reported as in forbearance, accounts reported as deferred or payment due amount removal, or freezing of account status reported as in forbearance, accounts reported as deferred or payment due amount removal, or freezing of account status
and/or past due amount.” T ransunion reports 7.2% of and/or past due amount.” T ransunion reports 7.2% of ~~aut o~~auto accounts and 3.6% of credit card loans in hardship in accounts and 3.6% of credit card loans in hardship in ~~June~~Jun e
2020. See T ransunion, 2020. See T ransunion, Monthly Industry Snapshot: Financial Services, at https://www.transunion.com/monthly-, at https://www.transunion.com/monthly-
industry-snapshotindustry-snapshot -fs. 33 Ryan Sandler and Judith Ricks, Household Debt and Credit, August 2020, p. 3; Lisa Dettling and Lauren Lambie-Hanson, Why Is the Default Rate So Low? How Economic Conditions and Public Policies Have Shaped Mortgage and Congressional Research Service 8 COVID-19: Household Debt During the Pandemic ~~-fs.~~
~~Congressional Research Service~~
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~~COVID-19: Household Debt During the Pandemic~~

~~residing in areas with more COVID-19 cases, with majority-Black or majority-Hispanic~~
~~populations, and with larger changes in unemployment since the start of the pandemic.”33~~
Household Debt Trends: Current Recession Compared with the Great Recession
The current recession created by the COVID-19 pandemic differs from the Great Recession caused by the 2007- The current recession created by the COVID-19 pandemic differs from the Great Recession caused by the 2007-
2009 financial crisis. Although the pandemic has caused lost income and financial insecurity, mortgage borrowers’ 2009 financial crisis. Although the pandemic has caused lost income and financial insecurity, mortgage borrowers’
household finances were general y stronger in light of stricter lending standards over the last several years.34 For household finances were general y stronger in light of stricter lending standards over the last several years.34 For
example, families have less mortgage debt and more equity in their homes. During the Great Recession, many example, families have less mortgage debt and more equity in their homes. During the Great Recession, many
families lost equity in their homes resulting from low- or zero-down payment requirements and fal ing home families lost equity in their homes resulting from low- or zero-down payment requirements and fal ing home
values. According to the Case-Shil er U.S. National Home Price Index, home prices acrossvalues. According to the Case-Shil er U.S. National Home Price Index, home prices across the United States fel the United States fel
more than 25% on average between the peak and the bottom of the housing bubble.35 This led to many more than 25% on average between the peak and the bottom of the housing bubble.35 This led to many
foreclosures, which destabilized local house prices and harmed local communities. In contrast, house prices have foreclosures, which destabilized local house prices and harmed local communities. In contrast, house prices have
~~not fal en~~risen during the COVID-19 pandemic.36 during the COVID-19 pandemic.36
Loan forbearance may be a more viable solution for families having trouble paying their mortgages during the Loan forbearance may be a more viable solution for families having trouble paying their mortgages during the
COVID-19 pandemic than during the Great Recession, because COVID-19 pandemic than during the Great Recession, because more families have equity in their homes.families have equity in their homes. According to According to
~~Black Knight estimates, only 9~~the CFPB, only 1% of borrowers in forbearance % of borrowers in forbearance ~~have~~had less than less than 105% of equity in their homes, and % of equity in their homes, and
~~almost 80% have at least 20%~~ 17% of borrowers in forbearance had less than 20% of equity in their homes,equity in their homes, suggesting that relatively few mortgage borrowers may be at suggesting that relatively few mortgage borrowers may be at
~~risk~~ risk for foreclosure at the moment.37 Borrowers with equity in their homesfor foreclosure at the moment.37 Borrowers with equity in their homes can avoid foreclosure through loan can avoid foreclosure through loan
forbearances,forbearances, mortgage refinancing, or if no longer affordable, sel ingmortgage refinancing, or if no longer affordable, sel ing the home; borrowers with negative equity the home; borrowers with negative equity
may not have these options.38 During the Great Recession, by contrast, fal ing may not have these options.38 During the Great Recession, by contrast, fal ing ~~home~~ home prices meant that many prices meant that many
families had negative equity, and therefore were more at risk of foreclosure.39 families had negative equity, and therefore were more at risk of foreclosure.39
Student and auto loan debt, however, are higher now for most households than during the Great Recession. The Student and auto loan debt, however, are higher now for most households than during the Great Recession. The
federal government owns most student loan debt in the United States, and these loans have been effectively in federal government owns most student loan debt in the United States, and these loans have been effectively in
loan forbearance during the pandemic, thus consumers have been able to choose not to pay on them. loan forbearance during the pandemic, thus consumers have been able to choose not to pay on them. However, some consumers may have trouble paying back their student loans when forbearance expires. Car loans Car loans
may also be vulnerable to becoming delinquent in the future. In recent years as auto lending has grown, somemay also be vulnerable to becoming delinquent in the future. In recent years as auto lending has grown, some
loans were made to subprime consumers who may be more likely to have trouble paying these loans back due to loans were made to subprime consumers who may be more likely to have trouble paying these loans back due to
~~the economic~~ the economic downturn.40 However, increaseddownturn.40 However, increased demand for used vehicles during the COVID-19 pandemic may demand for used vehicles during the COVID-19 pandemic may
~~limit~~ limit potential credit losses in this market, by al owing some consumers the option to sel their cars rather than potential credit losses in this market, by al owing some consumers the option to sel their cars rather than
becoming delinquent on their auto loans.41 becoming delinquent on their auto loans.41

~~33 Ryan Sandler and Judith Ricks, Household Debt and Credit, August 2020, p. 3.~~
Auto Delinquencies During the COVID-19 Pandemic, Board of Governors of the Federal Reserve System, March 4, 2021, at https://www.federalreserve.gov/econres/notes/feds-notes/why-is-the-default -rate-so-low-20210304.htm (hereinafter Dettling and Lambie-Hanson, Why Is the Default Rate So Low?, 2021). 34 See CRS InFocus CRS In Focus IF11413, 34 See CRS InFocus CRS In Focus IF11413, The Qualified Mortgage (QM) Rule and the QM Patch, by Darryl E. , by Darryl E.
Getter. Getter.
35 S&P Dow Jones Indices LLC, 35 S&P Dow Jones Indices LLC, S&P/Case-Shiller U.S. National Home Price Index [CSUSHPINSA] , retrieved from , retrieved from
FRED, Federal Reserve Bank of St. Louis, at https://fred.stlouisfed.org/series/CSUSHPINSA. FRED, Federal Reserve Bank of St. Louis, at https://fred.stlouisfed.org/series/CSUSHPINSA.
36 S&P Dow Jones Indices LLC, 36 S&P Dow Jones Indices LLC, S&P/Case-Shiller U.S. National Home Price Index [CSUSHPINSA] , retrieved from , retrieved from
FRED, Federal Reserve Bank of St. Louis, at https://fred.stlouisfed.org/series/CSUSHPINSA. FRED, Federal Reserve Bank of St. Louis, at https://fred.stlouisfed.org/series/CSUSHPINSA.
~~37 Black Knight, Black Knight’s August 2020 Mortgage Monitor: At Current Rate of Improvement, Delinquencies Will~~
~~Remain Above Pre-Pandemic Levels Until 2022; Loss Mitigation and High Levels of Equity Help Mitigate Foreclosure~~
~~Risk, October 5, 2020, p.16, at https://www.blackknightinc.com/black-knights-august-2020-mortgage-monitor/.~~
37 Erik Durbin et al., Characteristics of Mortgage Borrowers During the COVID-19 Pandemic, CFPB, May 2021, pp.7-8, at https://files.consumerfinance.gov/f/documents/cfpb_characteristics-mortgage-borrowers-during-covid-19-pandemic_report_2021-05.pdf. 38 Regulatory changes following the 2007-2009 financial crisis pertaining to mortgage servicing may also be making it 38 Regulatory changes following the 2007-2009 financial crisis pertaining to mortgage servicing may also be making it
easier to accommodate many consumers having trouble paying their mortgages. For more information on mortgage easier to accommodate many consumers having trouble paying their mortgages. For more information on mortgage
servicing, see CRS Insight IN11377, servicing, see CRS Insight IN11377, Mortgage Servicing Rights and Selected Market Developm ents, by Darryl E. , by Darryl E.
Getter. Getter.
39 For more information on the policy issues related to foreclosure and mortgage loan modifications, see CRS Report 39 For more information on the policy issues related to foreclosure and mortgage loan modifications, see CRS Report
R40210, R40210, Preserving Hom eownership: Foreclosure Prevention Initiatives, by Katie Jones. , by Katie Jones.
40 Jean Eaglesham and Ken Brown, “Auto-Lending Binge T hreatens to Unwind When Stimulus Measures Ease,” 40 Jean Eaglesham and Ken Brown, “Auto-Lending Binge T hreatens to Unwind When Stimulus Measures Ease,” Wall
Street Journal, August 7, 2020, at https://www.wsj.com/articles/auto-lending-binge-threatens-to-unwind-when-, August 7, 2020, at https://www.wsj.com/articles/auto-lending-binge-threatens-to-unwind-when-
stimulus-measures-ease-11596798003stimulus-measures-ease-11596798003; and AnnaMaria Andriotis and Ben Eisen, “ Risky Borrowers Are Falling Behind on Car Payments,” Wall Street Journal, April 5, 2021, at https://www.wsj.com/articles/risky-borrowers-are-falling-behind-on-car-payments-11617615001. .
41 Nathan Bomey, “Used Car Prices Spiking as COVID-19 Pandemic Shakes up the Market for New Cars,” 41 Nathan Bomey, “Used Car Prices Spiking as COVID-19 Pandemic Shakes up the Market for New Cars,” USA
Today, August 5, 2020, at https://www.usatoday.com/story/money/cars/2020/08/05/car-prices-coronavirus-pandemic-, August 5, 2020, at https://www.usatoday.com/story/money/cars/2020/08/05/car-prices-coronavirus-pandemic-
new-trucks-suvs/3297869001/. new-trucks-suvs/3297869001/.
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COVID-19: Household Debt During the Pandemic

Policy Impacts on Household Finances
The initial economic policy response to the COVID-19 pandemic was swift and large, as The initial economic policy response to the COVID-19 pandemic was swift and large, as
compared with that of previous recessions.42 This response to the economic impacts of the compared with that of previous recessions.42 This response to the economic impacts of the
pandemic have likely prevented many consumers from fal ing delinquent on their loan payments.pandemic have likely prevented many consumers from fal ing delinquent on their loan payments.43
This section highlights two important policy impacts that influenced these trends: consumer loan This section highlights two important policy impacts that influenced these trends: consumer loan
forbearance and macroeconomic policy to support households during the forbearance and macroeconomic policy to support households during the economic recession. economic recession.
Consumer Loan Forbearance and Other Financial Policy Responses
For Americans having trouble paying their loan obligations due to the COVID-19 pandemic, For Americans having trouble paying their loan obligations due to the COVID-19 pandemic,
Congress, financial regulators, and financial institutions responded by providing consumers relief Congress, financial regulators, and financial institutions responded by providing consumers relief
options, such as loan forbearance. A consumer’s ability to get a forbearance and the types of options, such as loan forbearance. A consumer’s ability to get a forbearance and the types of
terms under the forbearance may be significantly influenced by what type of institution owns the terms under the forbearance may be significantly influenced by what type of institution owns the
loan. These various institutions—including banks and credit unions, private nonbank financial loan. These various institutions—including banks and credit unions, private nonbank financial
institutions, government-sponsored enterprises (GSEs), and the federal government—are subject institutions, government-sponsored enterprises (GSEs), and the federal government—are subject
to different laws, regulations, and business considerations. As mentioned earlier, the CARES Act to different laws, regulations, and business considerations. As mentioned earlier, the CARES Act
establishes consumer rights to be granted forbearance for federal y backed mortgagesestablishes consumer rights to be granted forbearance for federal y backed mortgages ~~for up to a~~
~~year~~ (Section 4022) and for federal student loans (Section 3513) (Section 4022) and for federal student loans (Section 3513)~~, now through the end of 2020~~
~~due to administrative actions.43~~.44 The law also protects the credit histories of consumers with The law also protects the credit histories of consumers with
forbearance agreements until 120 days after the national emergency declared by forbearance agreements until 120 days after the national emergency declared by the President on the President on
March 13, 2020, terminates (Section 4021).March 13, 2020, terminates (Section 4021).4445 However, the act does not grant consumers loan However, the act does not grant consumers loan
forbearance for other types of consumer loan obligations, such as auto loans, credit cards, private forbearance for other types of consumer loan obligations, such as auto loans, credit cards, private
student loans, and bank-owned mortgages. In these cases, financial institutions have discretion student loans, and bank-owned mortgages. In these cases, financial institutions have discretion
about when and how to offer loan forbearance or other relief options to consumers. Therefore, about when and how to offer loan forbearance or other relief options to consumers. Therefore,
financial regulatory agencies have used existing statutory authorities to financial regulatory agencies have used existing statutory authorities to encourage loan encourage loan
forbearance and other financial relief options for affected consumers.forbearance and other financial relief options for affected consumers.4546 In response, many banks In response, many banks
and credit unions have announced measures to offer various forms of and credit unions have announced measures to offer various forms of assistance to affected assistance to affected
~~consumers.~~
~~Forbearance, particularly mortgage forbearance, may help consumers pay other bil s. Mortgage~~
~~debt is the largest debt obligation for many families. About two-thirds of al mortgage loans in the~~
consumers.
42 Romina Boccia and Justin Bogie, 42 Romina Boccia and Justin Bogie, This Is How Big the COVID-19 CARES Act Relief Bill Is, T he Heritage Foundation, , T he Heritage Foundation,
April 20, 2020, at https://www.heritage.org/budget-and-spending/commentary/how-big-the-covid-19-cares-act-relief-April 20, 2020, at https://www.heritage.org/budget-and-spending/commentary/how-big-the-covid-19-cares-act-relief-
bill. bill.
43 43 Dettling and Lambie-Hanson, Why Is the Default Rate So Low?, 2021. 44 For more information on T itle IV of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. For more information on T itle IV of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L.
116-136), which contains a number of provisions aimed broadly at stabilizing the economy and helping affected 116-136), which contains a number of provisions aimed broadly at stabilizing the economy and helping affected
households and businesses, see CRS Report R46301, households and businesses, see CRS Report R46301, Title IV Provisions of the CARES Act (P.L. 116 -136), coordinated , coordinated
by Andrew P. Scott . For more information about federal student loan debt relief in the context of COVID-19, see CRS by Andrew P. Scott . For more information about federal student loan debt relief in the context of COVID-19, see CRS
Report R46314, Report R46314, Federal Student Loan Debt Relief in the Context of COVID-19, by Alexandra Hegji. , by Alexandra Hegji.
4445 For more information on the credit reporting industry, see CRS Report R44125, For more information on the credit reporting industry, see CRS Report R44125, Consumer Credit Reporting, Credit
Bureaus, Credit Scoring, and Related Policy Issues, by Cheryl R. Cooper and Darryl E. Getter. , by Cheryl R. Cooper and Darryl E. Getter.
4546 Many financial regulatory agencies Many financial regulatory agencies have updated their guidancehave updated their guidance to help financial firms support consumer needs to help financial firms support consumer needs
during this time. Regulatory guidance does not force financial institutions to take any particular action for consumers during this time. Regulatory guidance does not force financial institutions to take any particular action for consumers
(such as offering loan forbearance), but it can (such as offering loan forbearance), but it can ~~enco urage~~encourage them to offer various forms of support. For more information them to offer various forms of support. For more information
on mortgage and bank regulators’ responses to COVID-19, see CRS Insight IN11316, on mortgage and bank regulators’ responses to COVID-19, see CRS Insight IN11316, COVID-19: Support for
Mortgage Lenders and Servicers, by Andrew P. Scott and Darryl E. Getter; ; and CRS Insight IN11278, and CRS Insight IN11278, Bank and Credit
Union Regulators’ Response to COVID-19, by Andrew P. Scott and David W. Perkins. In addition, the Federal Reserve , by Andrew P. Scott and David W. Perkins. In addition, the Federal Reserve
has provided liquidity to supporthas provided liquidity to support financial markets in response to COVID-19. For more information, see CRS Insight financial markets in response to COVID-19. For more information, see CRS Insight
IN11259, IN11259, Federal Reserve: Recent Actions in Response to COVID-19, by Marc Labonte. , by Marc Labonte.
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COVID-19: Household Debt During the Pandemic

Forbearance, particularly mortgage forbearance, may help consumers pay other bil s. Mortgage debt is the largest debt obligation for many families. About two-thirds of al mortgage loans in the United States were held or insured by the federal government and, therefore, covered by the United States were held or insured by the federal government and, therefore, covered by the
CARES Act’s consumer right to be granted loan forbearance.CARES Act’s consumer right to be granted loan forbearance.4647 Therefore, many Americans may Therefore, many Americans may
be able to access loan forbearance on their mortgage debt. For a family who lost income during be able to access loan forbearance on their mortgage debt. For a family who lost income during
the COVID-19 pandemic, skipping monthly payments on a mortgage or other loan may al ow the the COVID-19 pandemic, skipping monthly payments on a mortgage or other loan may al ow the
family to have enough money for food and other expenses during the month. In this way, access family to have enough money for food and other expenses during the month. In this way, access
to loan forbearance on one loan may help a consumer stay current on other loans, providing to loan forbearance on one loan may help a consumer stay current on other loans, providing
needed financial relief. needed financial relief.
Although many Americans took advantage of loan forbearance, some households affected by Although many Americans took advantage of loan forbearance, some households affected by
COVID-19 may not have requested or received loan forbearance. Some consumers’ loans may COVID-19 may not have requested or received loan forbearance. Some consumers’ loans may
fal outside of those with rights under the CARES Act. In addition, many consumers may not be fal outside of those with rights under the CARES Act. In addition, many consumers may not be
aware of the forbearance or credit reporting benefits in the CARES Act, which may make it more aware of the forbearance or credit reporting benefits in the CARES Act, which may make it more
difficult for them to access these benefits.difficult for them to access these benefits.4748 According to a Federal Reserve Bank of Philadelphia According to a Federal Reserve Bank of Philadelphia
survey, as of June 2020, less than a third of American consumers were aware of the CARES Act survey, as of June 2020, less than a third of American consumers were aware of the CARES Act
right to mortgage forbearance for federal y backed mortgages and fewer were aware of the credit right to mortgage forbearance for federal y backed mortgages and fewer were aware of the credit
~~reporting accommodations.48~~
~~Fiscal Policy Responses~~
~~In addition to consumer loan forbearance rights, the CARES Act also provided fiscal stimulus~~
~~that~~reporting accommodations.49 The survey in January 2020 suggests that some people who may benefit from forbearance may not know how forbearance plans work and whether they qualify.50 Fiscal Policy Responses In addition to consumer loan forbearance rights, the fiscal relief was likely another important factor making it easier for consumers to pay their existing loan obligations. In addition to the CARES Act, Congress also enacted other legislation to respond to the COVID-19 pandemic, including provisions in the CAA and ARPA. Fiscal relief provisions in these laws included income support for households, such as enhanced unemployment insurance and included income support for households, such as enhanced unemployment insurance and
relief checks. These income transfer programs may have helped some consumers make their relief checks. These income transfer programs may have helped some consumers make their
consumer credit payments on time, particularly those who lost income during the COVID-19 consumer credit payments on time, particularly those who lost income during the COVID-19
pandemic. Evidence pandemic. Evidence suggests that these programssuggests that these programs, —along with other along with other ~~provisions in the CARES Act,~~
COVID-19 pandemic relief provisions, such as the Paycheck Protection Programsuch as the Paycheck Protection Program, —increased total personal income increased total personal income ~~during the second and~~
~~third quarters of 2020.49 In fact, personal income remained higher in the third quarter of 2020~~
~~than before the pandemic began.50 This is highly unusual during a recession and likely~~
~~contributed to household debt patterns. For these reasons, some research suggests that fiscal~~
~~programs in the CARES Act may be limiting disruptions in the housing market.51~~
~~This section discusses two income transfer programs in the CARES Act—enhanced~~
~~unemployment benefits and economic impact payments—and discusses how they may have~~
~~helped some consumers meet their loan obligations.~~over the course of 2020 and the beginning of 2021.51 Personal income grew most notably in April 2020 and January and March 2021—the months in which the bulk of economic impact payments were sent.52 That personal income would increase at al is highly unusual during a recession and likely contributed

4647 For ownership of all mortgage loans in the United States, see Federal Reserve, “Financial Accounts of the United For ownership of all mortgage loans in the United States, see Federal Reserve, “Financial Accounts of the United
States—Z.1, 2020: Q1 release,” June 11, 2020, at https://www.federalreserve.gov/releases/z1/. Mortgage loans held or States—Z.1, 2020: Q1 release,” June 11, 2020, at https://www.federalreserve.gov/releases/z1/. Mortgage loans held or
insured by the federal government are not reported by age of mortgage borrower. insured by the federal government are not reported by age of mortgage borrower.
4748 Douglas Duncan, Douglas Duncan, COVID-19: The Need for Consumer Outreach and Home Purchase/Financing Digitization , Fannie , Fannie
Mae, Perspectives Blog, August 12, 2020, at https://www.fanniemae.com/research-and-insights/perspectives/covid-19-Mae, Perspectives Blog, August 12, 2020, at https://www.fanniemae.com/research-and-insights/perspectives/covid-19-
need-consumer-outreach-and-home-purchasefinancing-digitization. need-consumer-outreach-and-home-purchasefinancing-digitization.
4849 Federal Reserve Bank of Philadelphia, Consumer Finance Institute Special Report, Federal Reserve Bank of Philadelphia, Consumer Finance Institute Special Report, CFI COVID-19 Survey of
Consum ers—Wave 3 Reveals Im provem ents, but Not for Everyone,,” pp. 11-13, 31, at https://www.philadelphiafed.org/- pp. 11-13, 31, at https://www.philadelphiafed.org/-
//media/covid/cfi/cfi-covid-19-survey-of-consumers-wave3-updates.pdf. media/covid/cfi/cfi-covid-19-survey-of-consumers-wave3-updates.pdf.
~~49 For more informat ion~~50 Lambie-Hanson, Vickery, and Akana, Recent Data on Mortgage Forbearance, 2021, p. 3. 51 For more information on the Paycheck Protection Program (PPP), see CRS Report R46397, on the Paycheck Protection Program (PPP), see CRS Report R46397, SBA Paycheck
Protection Program (PPP) Loan Forgiveness: In Brief, by Robert Jay Dilger and Sean Lowry. , by Robert Jay Dilger and Sean Lowry.
~~50 For more information about the effect of policy on personal income during COVID-19, see CRS Report R46606,~~
COVID-19 and the U.S. Econom y, by Lida R. Weinstock; and CRS In Focus IF10501, ~~Introduction to U.S. Economy:~~
~~Personal Incom e, by Lida R. Weinstock.~~
~~51 Chris Cunningham and Kris Gerardi, COVID-19 Mortgage Relief—The Role of Income Support, Federal Reserve~~
~~Bank of Atlanta, MacroBlog, May 27, 2020, at https://www.frbatlanta.org/blogs/macroblog/2020/05/27/covid-19-~~
~~mortgage-relief-the-role-of-income-support.~~
~~Congressional Research Service~~
11

~~COVID-19: Household Debt During the Pandemic~~
52 Bureau of Economic Analysis, Effects of Selected Federal Pandemic Response Programs on Personal Income, March 2021, April 30, 2021, at https://www.bea.gov/sites/default/files/2021-04/effects-of-selected-federal-pandemic-response-programs-on-personal-income-march-2021.pdf. Congressional Research Service 11 COVID-19: Household Debt During the Pandemic to household debt patterns. For these reasons, some research suggests that fiscal programs in the CARES Act may be limiting disruptions in the housing market.53 This section discusses two income transfer programs in the CARES Act—enhanced unemployment benefits and economic impact payments—and discusses how they may have helped some consumers meet their loan obligations.
Enhanced Unemployment Benefits
Families with unemployed workers may be the most likely to have trouble paying their bil s Families with unemployed workers may be the most likely to have trouble paying their bil s
during the pandemic. Unemployment insurance can substitute for lost income and help families during the pandemic. Unemployment insurance can substitute for lost income and help families
meet payment obligations. meet payment obligations.
As Americans became unemployed at historic rates, Congress enhanced federal unemployment As Americans became unemployed at historic rates, Congress enhanced federal unemployment
benefitsbenefits ~~in the CARES Act~~, providing unemployed workers with more support for an extended , providing unemployed workers with more support for an extended
period of time, period of time, beyond what the worker would normal y be eligible to receive. beyond what the worker would normal y be eligible to receive. ~~The act provided a~~
~~weekly supplemental payment of $600 to those receiving benefits through the end of July and~~
~~extended unemployment insurance benefits for 13 weeks. In addition, the act provided~~
~~unemployment benefits to some not normal y eligible for unemployment insurance.52~~During the COVID-19 pandemic, unemployed workers have received a weekly supplement most weeks, and some workers who were not normal y eligible for unemployment insurance were able to receive unemployment benefits.54 Estimates ~~Estimates~~
suggest that most workers received at least as much in benefits as they lost suggest that most workers received at least as much in benefits as they lost in wages.55 ~~in wages.53~~
~~Following the expiration of the enhanced unemployment benefits at the end of July, President~~
~~Trump issued a memorandum on August 8, 2020, which cal ed on his Administration to approve a~~
~~lost wages assistance program that would authorize state governors to provide $400 per week,~~
~~$300 of which would be provided by the federal government as long as disaster relief funds last.54~~
These unemployment benefits likely made it possible for some families with an These unemployment benefits likely made it possible for some families with an ~~unemployed~~
unemployed worker to pay their bil sworker to pay their bil s ~~during the spring and summer of 2020.~~
. Economic Impact Payments
The CARES Act also provided The CARES Act also provided ~~one-time~~ direct payments to households equal to $1,200 per adult direct payments to households equal to $1,200 per adult
~~individual~~ individual and $500 per child, with amounts phased out for higher-income taxpayers.and $500 per child, with amounts phased out for higher-income taxpayers.5556 Payments Payments
began in April 2020.began in April 2020.5657 According to the IRS, more than 160 mil ion economic impact payments According to the IRS, more than 160 mil ion economic impact payments
were were delivered by August 14, 2020.delivered by August 14, 2020.5758 Economic impact payments constituted more than 12% of Economic impact payments constituted more than 12% of
total total personal income in the United States in April 2020.personal income in the United States in April 2020.5859

~~52 For more information on the unemployment insurance provisions in the CARES Act, see CRS In Focus IF11475,~~
~~Unem ploym ent~~53 Chris Cunningham and Kris Gerardi, COVID-19 Mortgage Relief—The Role of Income Support, Federal Reserve Bank of Atlanta, MacroBlog, May 27, 2020, at https://www.frbatlanta.org/blogs/macroblog/2020/05/27/covid-19-mortgage-relief-the-role-of-income-support. 54 For more information about unemployment insurance during the 116 th Congress, see CRS Report R45478, Unem ploym ent Insurance: Legislative Issues in the 116th Congress, by Julie M. Whittaker and Katelin P. Isaacs. For more information about unemployment insurance in the ARPA, see CRS In Focus IF11786, Unem ployment Insurance Provisions in the ~~CARES Act~~Am erican Rescue Plan Act of 2021 , by Katelin P. Isaacs and Julie M. Whittaker. , by Katelin P. Isaacs and Julie M. Whittaker.
5355 Peter Ganong, Pascal Noel, and Joseph Vavra, Peter Ganong, Pascal Noel, and Joseph Vavra, US Unemployment Insurance Replacement Rates During the
Pandem ic, University of Chicago, Becker Friedman Institute for Economics, Working Paper no. 2020-62, August 24, , University of Chicago, Becker Friedman Institute for Economics, Working Paper no. 2020-62, August 24,
2020. 2020.
~~54 U.S. President (T rump), “Memorandum on Authorizing the Other Needs Assistance Program for Major Disaster~~
~~Declarations Related to Coronavirus Disease 2019,” Weekly Compilation of Presidential Documents, August 8, 2020.~~
~~For more information on this memorandum, see CRS Legal Sidebar LSB10532,~~ ~~President Trum p’s Executive Actions~~
~~on Student Loans, Wage Assistance, Payroll Taxes, and Evictions: Initial Takeaways, by Kevin M. Lewis, Sean M.~~
~~Stiff, and Jay B. Sykes.~~
5556 For more information on the direct payments to individuals in the CARES Act, see CRS Insight IN11282, For more information on the direct payments to individuals in the CARES Act, see CRS Insight IN11282, COVID-19
and Direct Paym ents to Individuals: Sum m ary of the 2020 Recovery Rebates/Econom ic Impact Payments in the CARES
Act (P.L. 116-136), by Margot L. Crandall-Hollick. , by Margot L. Crandall-Hollick.
5657 U.S. Congress, House Committee on Ways and Means, U.S. Congress, House Committee on Ways and Means, Expected Timeline for Economic Impact Payments, 116th , 116th
Cong., April 16, 2020, at https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/Cong., April 16, 2020, at https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/
2020.04.16%20Rebate%20Payment%20Timeline%20FINAL.pdf . 2020.04.16%20Rebate%20Payment%20Timeline%20FINAL.pdf .
5758 Internal Revenue Service, “IRS takes new steps to ensure people with children receive $500 Economic Impact Internal Revenue Service, “IRS takes new steps to ensure people with children receive $500 Economic Impact
Payments,” press release, August 14, 2020, at https://www.irs.gov/newsroom/irs-takes-new-steps-to-ensure-people-Payments,” press release, August 14, 2020, at https://www.irs.gov/newsroom/irs-takes-new-steps-to-ensure-people-
with-children-receive-500-economic-impact-payments. with-children-receive-500-economic-impact-payments.
5859 Bureau of Economic Analysis, Bureau of Economic Analysis, Effects of Selected Federal Pandemic Response Programs on Personal Income, June
2020, July 31, 2020, at https://www.bea.gov/system/files/2020-07/effects-of-selected-federal-pandemic-response-, July 31, 2020, at https://www.bea.gov/system/files/2020-07/effects-of-selected-federal-pandemic-response-
programs-on-personal-income-june-2020.pdf. programs-on-personal-income-june-2020.pdf.
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COVID-19: Household Debt During the Pandemic

~~Current research suggests that many consumers used their impact payments to pay monthly bil s~~
~~or pay down~~ Provisions in the CAA and in ARPA also included direct payments to households. The second round of payments in the CAA provided direct payments equal to $600 per eligible individual and $600 per qualifying child, with amounts phased out for higher-income individuals. The third round of payments in the ARPA provided direct payments equal to $1,400 per eligible individual and $1,400 for each dependent (including dependents above the age of 17), with amounts phased out for higher income levels. 60 The bulk of the second round of payments were delivered in January 2021 and third round payments in March 2021.61 Current survey research suggests that many consumers used their impact payments to pay down debt. A National Bureau of Economic Research working paper using a large-scale debt. A National Bureau of Economic Research working paper using a large-scale
survey of consumers found that 52% of respondents said they used survey of consumers found that 52% of respondents said they used ~~the~~first-round funds to pay down debt, funds to pay down debt,
33% said they mostly saved it, and 15% said they spent or planned to spend most of it.33% said they mostly saved it, and 15% said they spent or planned to spend most of it.5962 Those Those
who reported using the economic impact payments to pay off debts were more likely to be who reported using the economic impact payments to pay off debts were more likely to be
unemployed, have COVID-19-related earnings losses, or have a mortgage, compared with other unemployed, have COVID-19-related earnings losses, or have a mortgage, compared with other
~~groups. On average, individuals reported spending around 40% of the payment, but this rate was~~
~~higher for those facing liquidity constraints, unemployed, living in larger households, less~~
~~educated, and who received payments of less than $1,200.~~
groups. . The Federal Reserve Bank of New York Survey of Consumer Expectations found that respondents spent or expected to spend 34.5% of the first round of stimulus toward debt, 37.4% of the second round of stimulus toward debt, and 33.7% of the third round of stimulus toward debt.63 According to the Census Household Pulse Survey for the period of March 17-29, 2021, for households that had received stimulus payments in the past seven days, roughly 50% reported using it mostly to pay off debt.64 Fiscal Stimulus During a Recession
Consumer spending is a key driver of short-run economic growth in the U.S. economy. As happened with the Consumer spending is a key driver of short-run economic growth in the U.S. economy. As happened with the
COVID-19 pandemic, significant drops in consumer spending can cause drops in aggregate demand (overal COVID-19 pandemic, significant drops in consumer spending can cause drops in aggregate demand (overal
spending), of which consumer spending is a significant component.spending), of which consumer spending is a significant component. Such a fal in aggregate demand wil general y Such a fal in aggregate demand wil general y
result in slower wage growth, decreased employment, lower business revenue, and lower business investment. result in slower wage growth, decreased employment, lower business revenue, and lower business investment.
Lost jobs and wage income can cause more reductions in consumer spending, leading to a more severe recession. Lost jobs and wage income can cause more reductions in consumer spending, leading to a more severe recession.
Conventional macroeconomic theory general y supports the use of fiscal stimulus in the form of short -term Conventional macroeconomic theory general y supports the use of fiscal stimulus in the form of short -term
government spending increases or tax decreases designed to temporarily spur economic activity.government spending increases or tax decreases designed to temporarily spur economic activity.6065 According to According to
this theory, fiscal stimulus can mitigate the decline in aggregate demand, reduce employment gaps, and guide the this theory, fiscal stimulus can mitigate the decline in aggregate demand, reduce employment gaps, and guide the
economy back to the ful -employment more quickly than would otherwise occur. Fiscal policy, such as taxes and economy back to the ful -employment more quickly than would otherwise occur. Fiscal policy, such as taxes and
transfers, can directly support a household’s income. Fiscal policy also affects household income and spending transfers, can directly support a household’s income. Fiscal policy also affects household income and spending
indirectly, through its effect on aggregate demand, leading to reduced unemployment and higher income. In these indirectly, through its effect on aggregate demand, leading to reduced unemployment and higher income. In these
ways, fiscal stimulus can help a household sustain its regular spending and more easily pay its loan obligations. ways, fiscal stimulus can help a household sustain its regular spending and more easily pay its loan obligations.
~~Future Household Finance Outlook~~
~~During the summer of 2020, some industry reports described declines in consumer loan~~
~~forbearance requests in mortgage, auto, credit card, and other consumer credit markets.61~~
~~However, it is unclear whether this pattern wil continue. Future economic projections look~~
~~uncertain, as it is difficult to predict the trajectory of future COVID-19 outbreaks and their~~
~~subsequent economic impacts. This section of the report discusses major uncertainties relating to~~
~~the outlook for household debt and consumer credit markets. The first subsection describes~~
~~current macroeconomic uncertainties; the second subsection discusses the importance of future~~
~~public policy; and the last subsection discusses uncertainties in consumer credit markets.~~
~~Future Macroeconomic Outlook Uncertainty~~
~~The path of economic recovery from the COVID-19 pandemic is highly uncertain. The economic~~
~~outlook is largely being driven by a public health crisis that is, in and of itself, difficult to predict.~~
~~To a large extent, the economy is unlikely to fully recover until the pandemic has ended. Fears of~~
~~the virus and social distancing measures make it unlikely that commerce can regain its pre-~~
~~pandemic pace while COVID-19 stil poses a threat. Workers in certain industries, such as retail,~~
~~restaurant, and travel, may not recover their jobs until local health regulations allow normal~~

~~59 Olivier Coibion, Yuriy Gorodnichenko, and Michael Weber, “How Did U.S. Consumers Use T heir Stimulus~~
~~Payments?” National Bureau of Economic Research, Working Paper no. 27693, August 2020, pp. 2 -3.~~
~~60 For more information on fiscal policy, see CRS In Focus IF11253, Introduction to U.S. Economy: Fiscal Policy, by~~
~~Lida R. Weinstock; and CRS Report R45723, Fiscal Policy: Econom ic Effects, by Marc Labonte.~~
~~61 Jon Prior, “PNC sees Steep Decline in Forbearance Requests. Will it Last?” American Banker, July 15, 2020; and~~
~~Jim Dobbs, “Big Banks Keeping Consumer Loan Losses in Check, at Least for Now,” American Banker, July 14, 2020.~~
~~Congressional Research Service~~
13

~~COVID-19: Household Debt During the Pandemic~~

~~operations and consumers demand these services again. Therefore, economic activity may depend~~
~~on factors such as when a vaccine wil be readily available or advances in treatment. In this case,~~
~~forecasting when employment wil recover may be difficult. Yet current projections suggest~~
~~possible long-run economic impacts. The Congressional Budget Office (CBO) forecasts, as of~~
~~July 2020, that both real gross domestic product wil remain below its potential and the~~
~~unemployment rate wil remain above the 2019 rate for the remainder of the decade (i.e., through~~
~~2030).62 The forecast assumes no policy changes and is subject to change. Other forecasts are~~
~~more optimistic about the rate of recovery, although they also suggest that the effects of COVID-~~
~~19 on unemployment may be long lasting.63~~
~~Future Public Policy Uncertainty~~
~~Future public policy wil affect the course of the economic recovery general y and developments~~
~~in household debt markets more specifical y. Mortgage and student loan forbearance programs~~
~~are stil in effect, but when these programs expire, some consumers may fal delinquent on their~~
~~loans. In addition, many CARES Act fiscal policy provisions have expired or been exhausted, and~~
~~personal income has general y declined since April. 64 The July expiration of the CARES Act’s~~
~~supplemental unemployment insurance payments could result in more consumers eventual y~~
~~being unable to stay current on their loans. President Trump’s memorandum extends a lower~~
~~supplemental payment for some unemployed workers, but reports suggest that these supplemental~~
~~payments started to expire as of the end of August in some states.65 For example, a recent research~~
~~study suggests that in August, without the benefit supplement, many unemployed workers may~~
~~have depleted their savings and reduced their spending.66~~
~~Some families losing unemployment insurance funds may have more trouble paying their~~
~~monthly consumer loan obligations with a reduced benefit.67 Industry reports suggest concerns~~
~~about future delinquencies or defaults on consumer loans without additional government~~

~~62 Congressional Budget Office, An Update to the Economic Outlook: 2020 to 2030, July 2, 2020, at~~
~~https://www.cbo.gov/publication/56442.~~
~~63 For example, see Board of Governors of the Federal Reserve System, FOMC Economic Projections, June 10, 2020,~~
~~at https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20200610.pdf; and Wall Street Journal,~~ ~~Econom ic~~
~~Forecasting Survey, June 1, 2020, at https://www.wsj.com/graphics/econsurvey/. For more information on the current~~
~~unemployment rate outlook, and what those changes would mean for the economy, see CRS Insight IN11460,~~ ~~COVID-~~
~~19: How Quickly Will Unem ploym ent Recover?~~ ~~, by Lida R. Weinstock.~~
~~64 For more information about the effect of policy on personal income during COVID-19, see CRS Report R46606,~~
COVID-19 and the U.S. Econom y, by Lida R. Weinstock; and CRS In Focus IF10501, ~~Introduction to U.S. Economy:~~
~~Personal Incom e, by Lida R. Weinstock.~~
~~65 Jeff Stein and Eli Rosenberg, “T rump’s $300 Unemployment Funding is Already Running Out, Leaving Millions in~~
~~Crisis Again,” Washington Post, September 11, 2020; and Elisabeth Buchwald, “More than 30 States are Preparing to~~
~~Distribute an Extra $300 in Unemployment Benefits—But How Long Will that Last?” MarketWatch, August 31, 2020~~
~~at https://www.marketwatch.com/story/more-than-30-states-have-distributed-an-extra-300-in-unemployment-benefits-~~
~~but-how-long-will-that -last-2020-08-27.~~
~~66 Diana Farrell et al.,~~ ~~The Unemployment Benefit Boost: Trends in Spending and Saving when the $600 Supplement~~
~~Ended, JPMorgan Chase & Co. Institute, Policy Brief, October 2020, at https://institute.jpmorganchase.com/content/~~
~~dam/jpmc/jpmorgan-chase-and-co/institute/pdf/Institute-UI-Benefits-Boost -Policy-Brief_ADA.pdf.~~
~~67 Economists from Goldman Sachs estimated that the expiration of the $600 supplemental payment could result in a~~
~~$70 billion hit to personal income in August, with the additional $300 benefit possibly covering up to $35 billion of~~
~~that, if fully implemented in August. If personal income was lowered by the full $70 billion, economists estimate this~~
~~would translate to a reduction in consumer spending p ower by about 6.5% of personal consumption expenditures (PCE)~~
~~in August. Blake T aylor, “US Daily: T he New $300 Benefit: T oo Little T oo Late for August Spending,”~~ ~~Goldman~~
~~Sachs Econom ics Research, August 23, 2020.~~
~~Congressional Research Service~~
14

~~COVID-19: Household Debt During the Pandemic~~

~~stimulus, such as unemployment aid.68 CBO stated that “if the additional $600 per week was~~
~~extended ... the extension would al ow people to make more payments on loans and therefore~~
~~have greater access to credit in the future than they would have otherwise.”69~~
~~Congress is currently debating whether COVID-19 pandemic relief provisions should be~~
~~extended or whether the cost of these proposals outweigh their benefits.70 Active legislation that~~
~~would modify, extend, or create new stimulus programs includes~~
~~ the Heroes Act (first version: H.R. 6800; second version: H.R. 925) in the House,~~
~~which first passed on May 15, 2020, then again on October 1, 2020; and~~
~~ the American Workers, Families, and Employers Assistance Act (S. 4318) in the~~
~~Senate, which was introduced on July 27, 2020.~~
~~Both bil s include additional relief payments to individuals71 and additional unemployment~~
~~insurance benefits.72 In addition, the Heroes Act would expand consumer rights to loan~~
~~forbearance and other payment relief during the COVID-19 pandemic.73~~
~~Consumer Credit Market Uncertainty~~
~~Promoting loan forbearance as a solution for consumers having trouble meeting their loan~~
~~obligations made sense when the COVID-19 pandemic was expected to be short-lived. However,~~
~~if the economic impacts of the COVID-19 pandemic persist for a longer period of time, then loan~~
~~forbearance may only be delaying~~ 60 For more information on the direct payments to individuals, see CRS Insight IN11605, COVID-19 and Direct Payments: Comparison of First and Second Round of “Stimulus Checks” to the Third Round in the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2), by Margot L. Crandall-Hollick. 61 Bureau of Economic Analysis, Effects of Selected Federal Pandemic Response Programs on Personal Income, March 2021, April 30, 2021, at https://www.bea.gov/sites/default/files/2021-04/effects-of-selected-federal-pandemic-response-programs-on-personal-income-march-2021.pdf. 62 Olivier Coibion, Yuriy Gorodnichenko, and Michael Weber, “How Did U.S. Consumers Use T heir Stimulus Payments?” National Bureau of Economic Research, Working Paper no. 27693, August 2020, pp. 2 -3. 63 Olivier Armantier et al., “An Update of How Households Are Using Stimulus Checks,” Liberty Street Economics, April 7, 2021, at https://libertystreeteconomics.newyorkfed.org/2021/04/an-update-on-how-households-are-using-stimulus-checks.html. 64 U.S. Census Bureau, Week 27 Household Pulse Survey: March 17-March 29, Household Pulse Survey, April 7, 2021, at https://www.census.gov/data/tables/2021/demo/hhp/hhp27.html. 65 For more information on fiscal policy, see CRS In Focus IF11253, Introduction to U.S. Economy: Fiscal Policy, by Lida R. Weinstock; and CRS Report R45723, Fiscal Policy: Econom ic Effects, by Marc Labonte. Congressional Research Service 13 COVID-19: Household Debt During the Pandemic Future Household Finance Outlook Evidence suggests that after an initial increase in consumer loan forbearance requests in the spring of 2020, the number of new forbearance requests have declined since then.66 However, it is unclear whether these consumers wil be in a good position to meet their financial obligations when loan forbearance ends. The CFPB estimates that 2 mil ion households are over three months behind on their mortgages (most in loan forbearance), and over 8 mil ion households are behind on their rent, and these household are more likely to be lower-income and racial or ethnic minorities than the U.S. population.67 Future economic projections look uncertain, as it is difficult to predict the trajectory of future COVID-19 outbreaks and their subsequent economic impacts. This section of the report discusses major uncertainties relating to the outlook for household debt and consumer credit markets. The first subsection describes current macroeconomic uncertainties; the second subsection discusses the importance of future public policy; and the last subsection discusses uncertainties in consumer credit markets. Future Macroeconomic Outlook Uncertainty Although the economy has begun to recover from the effects of the COVID-19 pandemic, how long it wil take for the economy to fully recover is uncertain. Gross domestic product (GDP) and unemployment improved in the latter half of 2020 but stil remained depressed and elevated, respectively, from prior to the pandemic. The recovery has also slowed somewhat since the third quarter of 2020: Real GDP rose by a historic annualized 33.4% in the third quarter of 2020, by 4.3% in the fourth quarter, and by 6.4% in the first quarter of 2021.68 Unemployment fel to 6.9% in October 2020 from a high of 14.8% in April 2020 but has only fal en to 6.0% as of March 2021.69 To a large extent, the economy is unlikely to fully recover until the pandemic has ended. Therefore, economic activity may depend on factors such as when most of the U.S. population wil be vaccinated, how effective the vaccine is against new variants, or other advances in treatment. In this case, forecasting when employment wil recover may be difficult. Yet current projections suggest possible long-run economic impacts. The Congressional Budget Office (CBO) forecasts, as of February 2021, that real GDP wil remain below its potential until 2025 and the unemployment rate wil remain elevated for several years, dropping below 5% by 2023 and below 4% by 2026.70 The forecast assumes no policy changes (and therefore does not take ARPA into account) and is subject to change. Other forecasts are more optimistic about the rate of recovery.71 66 Jon Prior, “PNC Sees Steep Decline in Forbearance Requests. Will It Last?,” American Banker, July 15, 2020; and Jim Dobbs, “Big Banks Keeping Consumer Loan Losses in Check, at Least for Now,” American Banker, July 14, 2020. 67 CFPB, Housing Insecurity and the COVID-19 Pandemic, March 2020, pp. 1-2, 13, at https://files.consumerfinance.gov/f/documents/cfpb_Housing_insecurity_and_the_COVID-19_pandemic.pdf. 68 Bureau of Economic Analysis, Gross Domestic Product, First Quarter 2021, April 29, 2021, at https://www.bea.gov/sites/default/files/2021-04/gdp1q21_adv.pdf. 69 Bureau of Labor Statistics, The Employment Situation—March 2021, April 2, 2021, at https://www.bls.gov/news.release/empsit.nr0.htm. 70 Congressional Budget Office, An Overview of the Budget and Economic Outlook: 2021-2031, February 1, 2021, at https://www.cbo.gov/publication/56965. 71 For example, see Board of Governors of the Federal Reserve System, FOMC Economic Projections, March 17, 2021, at https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20210317.pdf. Congressional Research Service 14 COVID-19: Household Debt During the Pandemic Future Public Policy Uncertainty Future public policy wil affect the course of the economic recovery general y and developments in household debt markets more specifical y. Mortgage and student loan forbearance programs are stil in effect, but when these programs expire, some consumers may fal delinquent on their loans. According to the Philadelphia Federal Reserve Bank survey, people with student loans were more likely than other Americans to experience job loss, reduced hours, or reduced income during the pandemic and more likely to report concerns about their ability to make ends meet.72 Therefore, when student loan forbearance expires, some consumers may have trouble paying back those loans. Households that rent may find it more difficult than homeowners to recover as the economy recovers. Renters did not have access to loan forbearance to pay their housing costs, unlike many homeowners with mortgages. In addition, research suggests that renters may have been more likely to lose labor income during the pandemic than were mortgage holders.73 According to the Philadelphia Federal Reserve Bank survey, as of January 2020, nearly 8% of renters reported currently owing back rent, and many of these renters expected to use economic impact payments or emergency rental assistance programs to help with repayment.74 These programs may help some consumers pay these rental debts, but it is unclear how many renters may stil struggle to repay rental debts going forward. In addition, unemployment insurance policy may impact consumers’ ability to pay back their loans. If unemployment remains elevated when enhanced unemployment insurance expires, some people may have or continue to have trouble paying their monthly consumer loan obligations. However, if employment rebounds quickly, this policy factor might be less of a risk to consumer credit markets. Consumer Credit Market Uncertainty Promoting loan forbearance as a solution for consumers having trouble meeting their loan obligations made sense when the COVID-19 pandemic was expected to be short-lived. However, if the economic impacts of the COVID-19 pandemic persist for a longer period of time, then loan forbearance may only be delaying some consumers from becoming delinquent and defaulting on their consumers from becoming delinquent and defaulting on their
loans, rather than preventing this outcome. If so, loans, rather than preventing this outcome. If so, these consumers may not be able to avoid the serious consumers may not be able to avoid the serious
~~consequences of loan default, such as debt collection, foreclosure, car repossession, or wage~~
~~garnishment.~~
~~For lenders, if the economic impacts of the COVID-19 pandemic continue to cause prolonged~~
~~disruptions and the CARES Act rights to loan forbearance expire, lenders may find that~~
~~voluntarily extending loan forbearance becomes a less viable option. Questions exist about~~
~~whether deferrals wil become current or whether they wil eventual y need to be charged off.74~~
~~Large numbers of missed consumer loan payments—due to forbearance or delinquency—could~~

~~68 Jon Prior, “Lenders Fear Mass Defaults Unless Unemployment Benefits are Extended,” American Banker, July 23,~~
~~2020.~~
~~69 Phillip L. Swagel, Economic Effects of Additional Unemployment Benefits of $600 per Week, Congressional Budget~~
~~Office, June 4, 2020, pp. 4-5, at https://www.cbo.gov/system/files/2020-06/56387-CBO-Grassley-Letter.pdf.~~
~~70 For more information about the economic impact of COVID-19 pandemic relief provision extensions, see CRS~~
~~Insight IN11475, Econom ic Activity and the Expiration of COVID-19 Relief Provisions, by Grant A. Driessen and Lida~~
~~R. Weinstock.~~
~~71 For more information on relief payments to individuals in these bills, see CRS Insight IN11397,~~ ~~COVID-19:~~
~~Sum m ary of the Direct Paym ents Proposed in the Heroes Act (H.R. 6800)~~ ~~, by Margot L. Crandall-Hollick; CRS Insight~~
~~IN11473,~~ ~~COVID-19: Sum m ary of Direct Paym ents in the Am erican Workers, Fam ilies, and Em ployers Assistance Act~~
~~(S. 4318), by Margot L. Crandall-Hollick; and CRS Insight IN11513,~~ ~~COVID-19 and Direct Paym ents to Individuals:~~
~~Com parison of Recent Proposals for a Second Round of Paym ents, by Margot L. Crandall-Hollick.~~
~~72 For more information on different unemployment insurance legislative proposals, see CRS Report R45478,~~
Unem ploym ent Insurance: Legislative Issues in the 116th Congress, by Julie M. Whittaker and Katelin P. Isaacs.
~~73 For more information, see CRS Insight IN11405,~~ ~~Heroes Act (H.R. 6800/H.R. 925): Selected Consum er Loan~~
~~Provisions, by Cheryl R. Cooper.~~
~~74 For example, some lenders are interested in how public policy may impact consumer debt repayment patterns. See~~
~~Bruce Cundiff, Forbearance and Deferrals m ay Influence the Debt Paym ent Hierarchy, Visa, Visa Business and~~
~~Economic Insights, June 2020, at https://usa.visa.com/dam/VCOM/regional/na/us/partner-with-us/documents/payment -~~
~~hierarchy-insight-june-2020.pdf.~~
~~Congressional Research Service~~
15

~~COVID-19: Household Debt During the Pandemic~~

~~have significant negative consequences for financial institutions and the financial system that~~
~~affects the future availability of credit.75 It is unclear, however, if the share of household debt at~~
~~risk of default may be enough to pose systemic risk to the financial system.76~~
~~In addition to impacts on current loans, CARES Act protections related to the credit reporting~~
~~system may also impact consumers’ ability to access credit in the future, possibly in positive and~~
~~negative ways. Consumers can harm their credit scores when they miss consumer loan payments,~~
~~and lower credit scores can impact their access to future credit.77 Section 4021 of the CARES Act~~
~~requires financial institutions to report to the credit bureaus that consumers are current on their~~
~~credit obligations if they enter into an agreement to defer, forbear, modify, make partial payments,~~
~~or get any other assistance on their loan payments from a financial institution and fulfil those~~
~~requirements.78 Before this law was enacted, lenders could choose whether to report loans in~~
~~forbearance as paid on time; with this law, the option is no longer voluntary for the lender.79~~
~~Although this CARES Act protection al ows consumers with loan forbearance agreements to~~
~~protect their on-time credit histories, the provision may also lead to some unintended~~
~~consequences.80 Financial institutions may find credit scores less predictive of whether a~~
~~consumer is currently creditworthy, in part due to deferrals being treated the same as on-time~~

75consequences of loan default, such as debt collection, foreclosure, car repossession, or wage garnishment. However, some argue that consumers in mortgage loan forbearance may not necessarily default or foreclose on their mortgages when forbearance expires, because many consumers in government mortgages may have repayment options and equity in their homes.75 72 T om Akana, CFI COVID-19 Survey of Consumers—Wave 6, Federal Reserve Bank of Philadelphia, Consumer Finance Institute, January 2020, pp. 8-9, at https://www.philadelphiafed.org/consumer-finance/consumer-credit/cfi-covid-19-survey-of-consumers-wave6-updates. 73 Fiona Greig, Chen Zhao, and Alexandra Lefevre, Renters vs. Homeowners: Income and Liquid Asset Trends during COVID-19, JP Morgan Chase & Co. Institute, March 2021, at https://www.jpmorganchase.com/institute/research/household-debt/renters-homeowners-income-and-liquid-asset-trends-during-covid-19. 74 T om Akana, CFI COVID-19 Survey of Consumers—Relief Programs, Vaccines, and the Effects of the Crisis on Renters and Mortgage Holders, Federal Reserve Bank of Philadelphia, Consumer Finance Institute, Febr uary 2020, p. 10, at https://www.philadelphiafed.org/-/media/frbp/assets/consumer-finance/reports/cfi-covid-19-survey-of-consumers-wave-7-updates.pdf. 75 Michael Neal and Laurie Goodman, The Predicted Foreclosure Surge Likely Won’t Happen, Even Among Financially Vulnerable Borrowers, Urban Institute, February 11, 2021, at https://www.urban.org/urban-wire/predicted- Congressional Research Service 15 COVID-19: Household Debt During the Pandemic For lenders, if the economic impacts of the COVID-19 pandemic continue to cause prolonged disruptions, questions exist about whether loans in forbearance wil become current or whether they wil eventual y need to be charged off.76 Large numbers of missed consumer loan payments—due to forbearance or delinquency—could have significant negative consequences for financial institutions and the financial system that affects the future availability of credit.77 It is unclear, however, if the share of household debt at risk of default may be enough to pose systemic risk to the financial system.78 In addition, financial institutions wil likely find it logistical y complicated to resolve consumer loans when loan forbearance ends. Particularly in the mortgage market, forbearance may end for many mortgages around the same time, and for those consumers who cannot pay at that time, there are concerns about whether mortgage servicers wil be able to modify these mortgages or whether a wave of home foreclosures wil occur.79 In response, the CFPB proposed new regulations around loss mitigation and foreclosure as COVID-19 pandemic loan forbearance expires.80 In addition to impacts on current loans, CARES Act protections related to the credit reporting system may also impact consumers’ ability to access credit in the future, possibly in positive and negative ways. Consumers can harm their credit scores when they miss consumer loan payments, and lower credit scores can impact their access to future credit.81 Section 4021 of the CARES Act requires financial institutions to report to the credit bureaus that consumers are current on their credit obligations if they enter into an agreement to defer, forbear, modify, make partial payments, or get any other assistance on their loan payments from a financial institution and fulfil those foreclosure-surge-likely-wont -happen-even-among-financially-vulnerable-borrowers. 76 For example, some lenders are interested in how public policy may impact consumer debt repayment patterns. See Bruce Cundiff, Forbearance and Deferrals m ay Influence the Debt Paym ent Hierarchy, Visa, Visa Business and Economic Insights, June 2020, at https://usa.visa.com/dam/VCOM/regional/na/us/partner-with-us/documents/payment -hierarchy-insight-june-2020.pdf. 77 For more information on banks’ exposure to consumer loan defaults during the COVID-19 pandemic, see CRS For more information on banks’ exposure to consumer loan defaults during the COVID-19 pandemic, see CRS
Insight IN11336, Insight IN11336, Bank Exposure to COVID-19 Risks: Mortgages and Consum er Loans, by David W. Perkins and Raj , by David W. Perkins and Raj
Gnanarajah. For more information on banking developments during Q2 2020, see CRS Insight Gnanarajah. For more information on banking developments during Q2 2020, see CRS Insight ~~IN11500~~IN11636, , COVID-19
Im pact on the Banking Industry: Conditions ~~in the Second Quarter~~at the End of 2020 , by David, by David W. Perkins and RajW. Perkins and Raj Gnanarajah. Gnanarajah.
For a broader overview of banking industry risks and policy responses during the COVIDFor a broader overview of banking industry risks and policy responses during the COVID -19 pandemic, see CRS-19 pandemic, see CRS
Report R46422, Report R46422, COVID-19 and the Banking Industry: Risks and Policy Responses, coordinated by David, coordinated by David W. Perkins. W. Perkins.
76 78 A Wells Fargo report estimates that approximately 6% of household debt outstanding may be at risk. See Jay Bryson, A Wells Fargo report estimates that approximately 6% of household debt outstanding may be at risk. See Jay Bryson,
T im Quinlan, and Shannon Seery, T im Quinlan, and Shannon Seery, Household Debt at Risk Am id Job Losses, Wells Fargo Securities, Economics Group: , Wells Fargo Securities, Economics Group:
Special Commentary, August 26, 2020, at https://www.wellsfargo.com/com/insights/economics/special-reports/. Special Commentary, August 26, 2020, at https://www.wellsfargo.com/com/insights/economics/special-reports/.
~~77 For more information on the credit reporting industry, see CRS Report R44125,~~ ~~Consumer Credit Reporting, Credit~~
~~Bureaus, Credit Scoring, and Related Policy Issues, by Cheryl R. Cooper and Darryl E. Getter.~~
7879 Kate Berry, “T he Mounting Costs of Protracted Mortgage Forbearance,” American Banker, March 25, 2020, at https://www.americanbanker.com/news/the-mounting-costs-of-protracted-mortgage-forbearance. 80 CFPB, “Protections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X,” 86 Federal Register 18840-18881, April 9, 2021. 81 For more information on the credit reporting industry, see CRS Report R44125, Consumer Credit Reporting, Credit Bureaus, Credit Scoring, and Related Policy Issues, by Cheryl R. Cooper and Darryl E. Getter. Congressional Research Service 16 COVID-19: Household Debt During the Pandemic requirements.82 Before this law was enacted, lenders could choose whether to report loans in forbearance as paid on time; with this law, the option is no longer voluntary for the lender.83 Although this CARES Act protection al ows consumers with loan forbearance agreements to protect their on-time credit histories, the provision may also lead to some unintended consequences.84 Financial institutions may find credit scores less predictive of whether a consumer is currently creditworthy, in part due to deferrals being treated the same as on-time payments.85 This situation could make it more difficult for consumers to access new credit, particularly those currently meeting their loan obligations.86 So far, most of the response to the COVID-19 pandemic in consumer debt markets has focused on helping consumers make existing debt payments, rather than focusing on access to credit, as the pandemic is ongoing. Evidence suggests that credit markets have already tightened and it may be more difficult for consumers to access new credit now than before the pandemic. According to the CFPB, new credit applications dropped dramatical y in March 2020, but while mortgage applications have more than recovered, credit card applications were stil 30% below their pre-pandemic levels as of September 2020.87 According to the Federal Reserve’s senior loan officer survey in the summer and fal of 2020, banks tightened credit standards for al types of household lending, including mortgages, credit cards, and auto loans.88 Therefore, consumers may have 82 T he covered period for this section starts on January 31, 2020, and extends to the later of 120 days after enactment or T he covered period for this section starts on January 31, 2020, and extends to the later of 120 days after enactment or
120 days after the national emergency declared by the President on March 13, 2020, terminates. If the consumer were 120 days after the national emergency declared by the President on March 13, 2020, terminates. If the consumer were
delinquent before the covered period, then the furnisher would maintain the delinquent status unless the consumer delinquent before the covered period, then the furnisher would maintain the delinquent status unless the consumer
brings the account or obligation current. For more information, see CFPB, brings the account or obligation current. For more information, see CFPB, Statem ent on Supervisory and Enforcem ent
Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act , April 1, 2020, at , April 1, 2020, at
https://files.consumerfinance.gov/f/documents/cfpb_credit -reporting-policy-statement_cares-act_2020-04.pdf. https://files.consumerfinance.gov/f/documents/cfpb_credit -reporting-policy-statement_cares-act_2020-04.pdf.
7983 Some consumers may still experience harm to their credit record because the CARES Act does not give consumers a Some consumers may still experience harm to their credit record because the CARES Act does not give consumers a
right to be granted forbearance for many types of consumer loans. Although many financial institutions have right to be granted forbearance for many types of consumer loans. Although many financial institutions have
announced efforts to provide assistance to affected consumers, lenders have discretion whether to enter into an announced efforts to provide assistance to affected consumers, lenders have discretion whether to enter into an
assistance agreement with an individual consumer. T herefore, the ability of consumers to protect their credit scores assistance agreement with an individual consumer. T herefore, the ability of consumers to protect their credit scores
could vary. Before the CARES Act passed, lenders had various options to could vary. Before the CARES Act passed, lenders had various options to ~~mitigate~~mitigat e the impact on consumers’ credit the impact on consumers’ credit
scores and future credit access following disasters or catastrophic events. For example, furnishers may use special scores and future credit access following disasters or catastrophic events. For example, furnishers may use special
codes to report delinquencies due to special circumstances. See CFPB, codes to report delinquencies due to special circumstances. See CFPB, Natural Disasters and Credit Reporting:
Quarterly Consum er Credit Trends, November 2018, at https://files.consumerfinance.gov/f/documents/bcfp_quarterly-, November 2018, at https://files.consumerfinance.gov/f/documents/bcfp_quarterly-
consumer-credit-trends_report_2018-11_natural-disaster-reporting.pdf. In addition, if lenders and consumers enter into consumer-credit-trends_report_2018-11_natural-disaster-reporting.pdf. In addition, if lenders and consumers enter into
loan forbearance agreements, then furnishers have the option to report to the credit bureaus that these consumers are loan forbearance agreements, then furnishers have the option to report to the credit bureaus that these consumers are
current on their credit obligations. current on their credit obligations.
8084 Section 4021 of the CARES Act requires loan forbearances to be reported to the credit bureaus in the same way, but Section 4021 of the CARES Act requires loan forbearances to be reported to the credit bureaus in the same way, but
“it does not address how model developers or individual lenders treat any particular variables or information “it does not address how model developers or individual lenders treat any particular variables or information ono n the the
back end.” See FinRegLab, back end.” See FinRegLab, Covid-19 Credit Reporting & Scoring Update, Research Brief, July 2020, , Research Brief, July 2020,
at https://finreglab.org/wp-content/uploads/2020/07/FinRegLab-Research-Brief-Covid-19-Credit-Reporting-Scoring-https://finreglab.org/wp-content/uploads/2020/07/FinRegLab-Research-Brief-Covid-19-Credit-Reporting-Scoring-
Update.pdf (hereinafter FinRegLab, Update.pdf (hereinafter FinRegLab, Covid-19 Credit Reporting & Scoring Update, July 2020). , July 2020).
~~Congressional Research Service~~
16

~~COVID-19: Household Debt During the Pandemic~~

~~payments.81 This situation could make it more difficult for consumers to access new credit,~~
~~particularly those currently meeting their loan obligations.82~~
~~So far, most of the response to the COVID-19 pandemic in consumer debt markets has focused on~~
~~helping consumers make existing debt payments, rather than focusing on access to credit, as the~~
~~pandemic is ongoing. Evidence suggests that credit markets have already tightened and it may be~~
~~more difficult for consumers to access new credit now than before the pandemic. According to the~~
~~CFPB, new credit applications dropped dramatical y between the first and last weeks of March~~
~~2020, as “auto loan inquiries dropped by 52 percent ... new mortgage inquiries dropped by 27~~
~~percent, and revolving credit card inquiries declined by 40 percent.”83 According to the Federal~~
~~Reserve’s senior loan officer survey in the summer and fal of 2020, banks tightened credit~~
~~standards for al types of household lending, including mortgages, credit cards, and auto loans.84~~
~~Therefore, consumers may have needed higher credit scores, larger down payments, or other~~
~~more stringent requirements to qualify for new credit.~~85 Current macroeconomic uncertainties may also make credit scores less predictive of future consumer defaults. See AnnaMaria Andriotis, “‘Flying Blind Into a Credit Storm’: Widespread Deferrals Mean Banks Can’t T ell Who’s Creditworthy,” Wall Street Journal, June 29, 2020. 86 FinRegLab, Covid-19 Credit Reporting & Scoring Update, July 2020, p. 7. 87 Éva Nagypál, Christa Gibbs, and Scott Fulford, The Early Effects of the COVID-19 Pandemic on Credit Applications, CFPB, CFPB Office of Research Special Issue Brief, April 2020, p. 1, at https://www.consumerfinance.gov/data-research/research-reports/covid-19-early-effects-credit -applications/; Scott Fulford, Christa Gibbs, and Éva Nagypál, Credit Applications Rem ain Depressed for Credit Card and Auto Loans, CFPB, December 23 2020, at https://www.consumerfinance.gov/about -us/blog/credit-applications-remain-depressed-for-credit -cards-and-auto-loans/. 88 Board of Governors of the Federal Reserve System, Senior Loan Officer Opinion Survey on Bank Lending Practices, July and October 2020, at https://www.federalreserve.gov/data/sloos.htm. Congressional Research Service 17 COVID-19: Household Debt During the Pandemic needed higher credit scores, larger down payments, or other more stringent requirements to qualify for new credit. However, in the winter of 2021, some banks reported easing credit standards in non-mortgage credit markets, such as credit cards and auto loans.89 In addition, in the credit card market, In addition, in the credit card market,
although evidence suggests limited reductions in credit card limits, the COVID-19 pandemic has although evidence suggests limited reductions in credit card limits, the COVID-19 pandemic has
likely led to more credit card account closures and fewer credit-limit increases.likely led to more credit card account closures and fewer credit-limit increases.8590 While some While some
creditors may be tightening standards across the board over concerns that creditors may be tightening standards across the board over concerns that mandatory credit mandatory credit
reporting provisions may result in inaccurate assessments of credit risk,reporting provisions may result in inaccurate assessments of credit risk,8691 others argue that others argue that
broader macroeconomic uncertainties may be driving this trend.broader macroeconomic uncertainties may be driving this trend.8792 For example, some lenders may For example, some lenders may
be reluctant to make new loans given that many borrowers could stil be vulnerable to potential be reluctant to make new loans given that many borrowers could stil be vulnerable to potential
job losses and need future forbearance, which generates costs for lenders. If limited access to job losses and need future forbearance, which generates costs for lenders. If limited access to
credit continues, it could make it more difficult for consumers to buy homes, cars, or credit continues, it could make it more difficult for consumers to buy homes, cars, or other large other large
purchases, harming the economic recovery. purchases, harming the economic recovery.

Author Information

Cheryl R. Cooper, Coordinator Cheryl R. Cooper, Coordinator
Lida R. Weinstock Lida R. Weinstock
Analyst in Financial Economics Analyst in Financial Economics
Analyst in Macroeconomic Policy Analyst in Macroeconomic Policy

Maura Mullins Maura Mullins

Senior Research Librarian Disclaimer This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you wish to copy or otherwise use copyrighted material. 89~~Research Librarian~~

~~81 Current macroeconomic uncertainties may also make credit scores less predictive of future consumer defaults. See~~
~~AnnaMaria Andriotis, “‘Flying Blind Into a Credit Storm’: Widespread Deferrals Mean Banks Can’t T ell Who’s~~
~~Creditworthy,” Wall Street Journal, June 29, 2020.~~
~~82 FinRegLab, Covid-19 Credit Reporting & Scoring Update, July 2020, p. 7.~~
~~83 Éva Nagypál, Christa Gibbs, and Scott Fulford,~~ ~~The Early Effects of the COVID-19 Pandemic on Credit~~
~~Applications, CFPB, CFPB Office of Research Special Issue Brief, April 2020, p. 1, at~~
~~https://www.consumerfinance.gov/data-research/research-reports/covid-19-early-effects-credit -applications/.~~
84 Board of Governors of the Federal Reserve System, Board of Governors of the Federal Reserve System, Senior Loan Officer Opinion Survey on Bank Lending Practices, ,
~~July and October 2020~~January 2021, at https://www.federalreserve.gov/data/sloos.htm. , at https://www.federalreserve.gov/data/sloos.htm.
8590 Ryan Sandler and Judith Ricks, Household Debt and Credit , August 2020, p. 3; and Larry Santucci, How Has the Ryan Sandler and Judith Ricks, Household Debt and Credit , August 2020, p. 3; and Larry Santucci, How Has the
COVID-19 Pandemic Affected the Supply of Consumer Credit?: A Preliminary Look at the U.S. Credit Card Market, COVID-19 Pandemic Affected the Supply of Consumer Credit?: A Preliminary Look at the U.S. Credit Card Market,
Federal Reserve Bank of Philadelphia, Consumer Finance Institute Special Report, August 2020, p. 3, at Federal Reserve Bank of Philadelphia, Consumer Finance Institute Special Report, August 2020, p. 3, at
https://www.philadelphiafed.org/-/media/covid/cfi/cfi-credit-cards-and-covid-19.pdf. https://www.philadelphiafed.org/-/media/covid/cfi/cfi-credit-cards-and-covid-19.pdf.
8691 FinRegLab, FinRegLab, Covid-19 Credit Reporting & Scoring Update, July 2020, p. 7. , July 2020, p. 7.
8792 FinRegLab, FinRegLab, Covid-19 Credit Reporting & Scoring Update, July 2020, p. 16. , July 2020, p. 16.
Congressional Research Service Congressional Research Service
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~~COVID-19: Household Debt During the Pandemic~~

~~Disclaimer~~
~~This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan~~
~~shared staff to congressional committees and Members of Congress. It operates solely at the behest of and~~
~~under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other~~
~~than public understanding of information that has been provided by CRS to Members of Congress in~~
~~connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not~~
~~subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in~~
~~its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or~~
~~material from a third party, you may need to obtain the permission of the copyright holder if you wish to~~
~~copy or otherwise use copyrighted material.~~

~~Congressional Research Service~~
~~R46578~~ ~~· VERSION 3~~ R46578 · VERSION 4 · UPDATED
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