Note: The data are converted to constant 2020 dollars using the consumer price index. Student loan data begin in 2005.
Source: Federal Reserve Bank of New York Consumer Credit Panel/Equifax; Bureau of Labor Statistics, consumer price index via Haver Analytics.
2-15. Auto Loan Balances
Note: Subprime are those with an Equifax Risk Score below 620; near prime are from 620 to 719; prime are greater than 719. Scores are measured contemporaneously. The data are converted to constant 2020 dollars using the consumer price index.
Source: Federal Reserve Bank of New York Consumer Credit Panel/Equifax; Bureau of Labor Statistics, consumer price index via Haver Analytics.
Although conditions for many households have improved, some households continue to struggle to make consumer debt payments
After jumping to a peak of about 9 percent in in response to the COVID-19 outbreak, the share of auto loans that were either delinquent or in loss mitigation declined to 4.5 percent in February (figure 2-16). Many auto loan borrowers in loss mitigation have not made a payment in several months. As of February, nearly 3.5 percent of all auto loans had received no payments since November, although a large fraction of those loans were in loss mitigation.
2-16. Auto Loss Mitigation and Delinquency
Note: Loss mitigation includes tradelines that have a narrative code of forbearance, natural disaster, payment deferral (including partial), loan modification (including federal government plans), or loans with no scheduled payment and a nonzero balance. The line break represents the data transitioning from quarterly to monthly beginning .
Consumer credit card balances contracted sharply in 2020 in response to depressed consumer spending, declines in credit card utilization rates, and a drop in new card originations (figure 2-17). Some evidence suggests that the share of credit card balances in forbearance has declined notably from last summer but remains above its pre-pandemic levels. The share of credit card balances in delinquency was roughly flat for borrowers with prime and near-prime credit scores between October and December, following earlier declines, while delinquency rates for borrowers with subprime scores ticked up in December (figure 2-18).
2-17. Credit Card Balances
Note: Subprime are those with an Equifax Risk Score below 620; near prime are from 620 to 719; prime are greater than 719. Scores are measured contemporaneously. The data are converted to constant 2020 dollars using the consumer price index.
Source: Federal Reserve Bank of New York Consumer Credit Panel/Equifax; Bureau of Labor Statistics, consumer price index via Haver Analytics.
2-18. Credit Card Delinquency Rates
Note: Delinquency is at least 30 days past due, excluding severe derogatory loans. The data are four-quarter moving averages. Subprime are those with an Equifax Risk Score below 620; near prime are from 620 to 719; prime are greater than 719. Credit scores are lagged four quarters.
Finally, the risk that student loan debt poses to the financial system appears limited at this time. Most of the loans were issued through government programs and are owed by households in the top 40 percent of the income distribution. Moreover, protections originally introduced in the Coronavirus pawn shop Maine Aid, Relief, and Economic Security Act (CARES Act)-and later extended-guarantee payment forbearance and stop interest accrual through for most federal student loans.
The Paycheck Protection Program Liquidity Facility
The PPP was established at the outset of the pandemic by the CARES Act to provide payroll support to small businesses and other small organizations. Under the PPP, lenders make loans that are guaranteed by the Small Business Administration (SBA) and are forgivable if the borrower uses the proceeds to keep workers on its payroll and to pay related expenses. The PPP opened on . Following the enactment of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act), the PPP reopened on , and the SBA will stop receiving applications for PPP loans on , the SBA has approved 8.7 million PPP loans totaling $734 billion.