The Consumer Financial Protection Bureau said consumer credit levels are reaching pre-pandemic levels, while the New York Federal Reserve Bank said Tuesday that consumer credit extensions now exceed 2019 levels.
The CFPB report, released July 27, said across auto loans, new mortgages and revolving credit cards, consumers are requesting credit at normal levels, an indication that middle class households are recovering from the economic shock of the coronavirus pandemic.
Acting CFPB Director David Uejio noted in a statement that stark differences among consumer credit tiers indicate further equity problems facing U.S. households. Fewer customers in the lowest and highest credit tiers applied for credit than during pre-pandemic periods, he said.
"We will continue to keep a close watch on the marketplace as the economic recovery continues, to help ensure all consumers have access to financial products and services that are fair, transparent, and competitive," Uejio said.
Auto loan inquiries fell 52 percent at the end of March 2020 compared with prior-year levels, the CFPB said, and returned to pre-pandemic trends by January 2021.
The New York Fed, meanwhile, noted new auto loans and mortgages hit an all-time high in the second quarter in the history of the report. Mortgage originations, which include mortgage refinances, grew to $1.2 trillion. In the past year, mortgage originations reached $4.6 trillion, another landmark for the study. Auto loan originations, which include both loans and leases, reached $202 billion in the second quarter.
The bank expressed a note of caution about rebounding consumer credit similar to the CFPB — some borrowers remain in financial distress, said Joelle Scally, administrator of the Center for Microeconomic Data at the New York Fed.
"There are still two million borrowers in mortgage forbearance who are vulnerable to financial distress once the forbearance programs come to an end," she said.
Still, delinquency remains down across credit products, reflecting the ongoing positive benefits of the CARES Act and forbearance programs voluntarily offered by lenders.
