CFPB: Tenants at risk without COVID relief
Millions of U.S. tenants and their families face economic damage from the COVID-19 pandemic as federal and state relief programs end, the Consumer Financial Protection Bureau (CFPB) said in a new report.
The report, released Friday, September 17, concludes that some government relief efforts have helped people maintain financial stability during the pandemic.
The CFPB compared landlords to tenants and learned that on average tenants have seen their economic situation improve through programs such as stimulus payments and additional / extended unemployment benefits.
These renters were more likely to be black or Hispanic, more likely to be female and more likely to have lower incomes, according to the report.
“Past recessions and depressions have seen communities of color and low-income communities of all races and ethnicities left behind as the economy as a whole recovers,” said Dave Uejio, acting director of CFPB. “We cannot repeat this story.”
The agency says the country must “amplify and protect” the gains made by tenants to ensure a fair recovery from COVID.
The report found that before the pandemic, the average credit scores of renters were 86 points lower than those of homeowners with a mortgage and 106 points lower than those of homeowners without a mortgage. But despite the mediocre job market during the pandemic, tenants saw their financial conditions improve, with their credit scores increasing by 16 points, compared to 10 points for homeowners with mortgages and 7 points for other homeowners.
Another finding of the report was that tenants saw their financial situation improve further due to government intervention over landlords, with things like delinquency, credit card use, and card debt. credit decreasing as a result of stimulus payments and unemployment changes.
Read more: CFPB: Credit requests return to pre-pandemic levels
In July, the CFPB released a report that found applications for mortgages, auto loans and revolving credit cards had more or less returned to pre-pandemic levels.
Prime and near-prime consumers are the main drivers of this recovery, according to the report, with demand from subprime and deep subprime borrowers still low for all types of credit except super-prime borrowers, who are still seeking home loans. .